Intuit (NASDAQ:INTU) and Pegasystems (NASDAQ:PEGA) Head to Head Comparison

Intuit (NASDAQ:INTU) and Pegasystems (NASDAQ:PEGA) are both large-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, earnings, institutional ownership, profitability and dividends.

Insider & Institutional Ownership

83.7% of Intuit shares are held by institutional investors. Comparatively, 46.9% of Pegasystems shares are held by institutional investors. 2.5% of Intuit shares are held by company insiders. Comparatively, 50.1% of Pegasystems shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Intuit pays an annual dividend of $4.80 per share and has a dividend yield of 0.7%. Pegasystems pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. Intuit pays out 32.8% of its earnings in the form of a dividend. Pegasystems pays out 8.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Intuit has raised its dividend for 13 consecutive years. Intuit is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Intuit has a beta of 1.27, meaning that its share price is 27% more volatile than the S&P 500. Comparatively, Pegasystems has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Intuit and Pegasystems, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Intuit	1	4	23	1	2.83
Pegasystems	0	2	9	0	2.82

Intuit currently has a consensus target price of $796.60, suggesting a potential upside of 17.74%. Pegasystems has a consensus target price of $70.05, suggesting a potential upside of 12.21%. Given Intuit’s stronger consensus rating and higher probable upside, research analysts clearly believe Intuit is more favorable than Pegasystems.

Profitability

This table compares Intuit and Pegasystems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Intuit	21.19%	23.52%	13.10%
Pegasystems	16.05%	43.49%	18.42%

Earnings & Valuation

This table compares Intuit and Pegasystems”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Intuit	$18.83 billion	10.00	$3.87 billion	$14.63	46.24
Pegasystems	$1.50 billion	7.08	$99.19 million	$1.49	41.90

Intuit has higher revenue and earnings than Pegasystems. Pegasystems is trading at a lower price-to-earnings ratio than Intuit, indicating that it is currently the more affordable of the two stocks.

Summary

Intuit beats Pegasystems on 14 of the 18 factors compared between the two stocks.

About Intuit

Intuit Inc. provides financial management and compliance products and services for consumers, small businesses, self-employed, and accounting professionals in the United States, Canada, and internationally. The company operates in four segments: Small Business & Self-Employed, Consumer, Credit Karma, and ProTax. The Small Business & Self-Employed segment provides QuickBooks services, that includes financial and business management online services and desktop software, payroll solutions, time tracking, merchant payment processing solutions, and financing for small businesses; and Mailchimp services, such as e-commerce, marketing automation, and customer relationship management. This segment also offers QuickBooks online services and desktop software solutions comprising QuickBooks Online Advanced, a cloud-based solution; QuickBooks Enterprise, a hosted solution; and QuickBooks Self-Employed solution; payment-processing solutions, including credit and debit cards, Apple Pay, and ACH payment services; and financial supplies and financing for small businesses, as well as electronic filing of federal and state income tax returns. The Consumer segment provides TurboTax income tax preparation products and services. The Credit Karma segment offers consumers with a personal finance platform that provides personalized recommendations of home, auto, and personal loans, as well as credit cards and insurance products. The ProTax segment provides Lacerte, ProSeries, and ProFile desktop tax-preparation software products; and ProConnect Tax Online tax products, electronic tax filing service, and bank products and related services. It sells products and services through various sales and distribution channels, including multi-channel shop-and-buy experiences, websites and call centers, mobile application stores, and retail and other channels. The company was founded in 1983 and is headquartered in Mountain View, California.

About Pegasystems

Pegasystems Inc. develops, markets, licenses, hosts, and supports enterprise software in the United States, rest of the Americas, the United Kingdom, rest of Europe, the Middle East, Africa, and the Asia-Pacific. The company provides Pega Infinity, a software portfolio comprising of Pega Customer Decision Hub, a real-time AI-powered decision engine to enhance customer acquisition and experiences across inbound, outbound, and paid media channels; Pega Customer Service to anticipate customer needs, connect customers to people and systems, and automate customer interactions to evolve the customer service experience, as well as to allow enterprises to deliver interactions across channels and enhance employee productivity; and Pega Platform, an intelligent automation software for increasing efficiency of clients’ processes and workflows. It also offers Situational Layer Cake that organizes logic into layers that map to the unique dimensions of a client’s business, such as customer types, lines of business, geographies, etc.; Pega Express Methodology and low code that connects enterprise data and systems to customer experience channels; Pega Cloud that allows clients to develop, test, and deploy applications; Pega Catalyst, which helps clients to transform and prototype their customer journeys; Pega Academy, which offers instructor-led and online training to its employees, clients, and partners; and global service assurance and client support services. It primarily markets its software and services to financial services, healthcare, communications and media, government, insurance, manufacturing and high tech, and consumer services markets through a direct sales force, as well as partnerships with technology providers and application developers. Pegasystems Inc. was incorporated in 1983 and is headquartered in Cambridge, Massachusetts.