Paylocity (NASDAQ:PCTY) versus Charles River Associates (NASDAQ:CRAI) Critical Survey

Charles River Associates (NASDAQ:CRAI) and Paylocity (NASDAQ:PCTY) are both industrials companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitability, earnings, analyst recommendations, valuation and risk.

Profitability

This table compares Charles River Associates and Paylocity’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Charles River Associates	6.20%	27.31%	8.36%
Paylocity	15.23%	27.02%	5.78%

Risk and Volatility

Charles River Associates has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, Paylocity has a beta of 0.5, suggesting that its stock price is 50% less volatile than the S&P 500.

Insider & Institutional Ownership

84.1% of Charles River Associates shares are owned by institutional investors. Comparatively, 94.8% of Paylocity shares are owned by institutional investors. 4.5% of Charles River Associates shares are owned by insiders. Comparatively, 19.4% of Paylocity shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Charles River Associates and Paylocity”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Charles River Associates	$751.58 million	1.50	$54.78 million	$7.51	23.83
Paylocity	$1.77 billion	4.74	$269.74 million	$4.95	31.94

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Charles River Associates and Paylocity, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Charles River Associates	0	1	1	0	2.50
Paylocity	0	5	12	0	2.71

Charles River Associates presently has a consensus price target of $245.00, suggesting a potential upside of 36.88%. Paylocity has a consensus price target of $163.76, suggesting a potential upside of 3.58%. Given Charles River Associates’ higher probable upside, equities analysts clearly believe Charles River Associates is more favorable than Paylocity.

Summary

Paylocity beats Charles River Associates on 9 of the 14 factors compared between the two stocks.

About Charles River Associates

CRA International, Inc., together with its subsidiaries, provides economic, financial, and management consulting services worldwide. It advises clients on economic and financial matters pertaining to litigation and regulatory proceedings; and guides corporations through business strategy and performance-related issues. The company also offers consulting services, including research and analysis, expert testimony, and support in litigation and regulatory proceedings in the areas of finance, accounting, economics, insurance, and forensic accounting and investigations to corporate clients and attorneys. In addition, it offers management consulting services comprising strategy development, performance improvement, corporate strategy and portfolio analysis, estimation of market demand, environmental, social and corporate governance and sustainability strategy and analysis, design and implementation of auction and bidding, new product pricing strategies, survey and market research, valuation of intellectual property and other assets, assessment of competitors’ actions, and analysis of new sources of supply. The company serves various industries, including communications and media; consumer, health, and wellness products; energy; entertainment and leisure; financial services; healthcare; life sciences; manufacturing and industries; natural resources; retail and distribution; technology; and transportation. CRA International, Inc. was incorporated in 1965 and is headquartered in Boston, Massachusetts.

About Paylocity

Paylocity Holding Corporation engages in the provision of cloud-based human capital management and payroll software solutions for workforce in the United States. The company offers payroll software solution for global payroll, expense management, tax services, on demand payment, and garnishment managed services; and time and labor management software for time and attendance, scheduling, and time collection. It also provides human resources (HR) software solutions for employee self-service, compliance, HR edge, data analytics, and workflows and documents, as well as human resource management system; talent management system for recruiting, onboarding, performance, compensation, and learning; and benefits administration software. In addition, the company offers employee experience platform for community, employee voice, recognition and rewards, video, and modern workforce index; HR reporting software; and mobile HR solutions. Further, it provides implementation and training, client, and tax and regulatory services. The company serves for-profit and non-profit organizations across industries, including business services, financial services, healthcare, manufacturing, restaurants, retail, technology, and others. It sells its products through sales representatives. The company was founded in 1997 and is headquartered in Schaumburg, Illinois.