Critical Contrast: Verisign (NASDAQ:VRSN) vs. Computer Programs & Systems (NASDAQ:CPSI)

Verisign (NASDAQ:VRSN) and Computer Programs & Systems (NASDAQ:CPSI) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Profitability

This table compares Verisign and Computer Programs & Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Verisign 49.98% -43.07% 31.46%
Computer Programs & Systems 6.14% 15.09% 7.15%

Dividends

Computer Programs & Systems pays an annual dividend of $0.40 per share and has a dividend yield of 1.5%. Verisign does not pay a dividend. Computer Programs & Systems pays out 20.6% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent recommendations and price targets for Verisign and Computer Programs & Systems, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Verisign 0 3 1 0 2.25
Computer Programs & Systems 1 4 2 0 2.14

Verisign presently has a consensus price target of $170.00, indicating a potential downside of 20.64%. Computer Programs & Systems has a consensus price target of $28.58, indicating a potential upside of 5.89%. Given Computer Programs & Systems’ higher possible upside, analysts clearly believe Computer Programs & Systems is more favorable than Verisign.

Institutional and Insider Ownership

91.5% of Verisign shares are held by institutional investors. Comparatively, 79.3% of Computer Programs & Systems shares are held by institutional investors. 1.2% of Verisign shares are held by company insiders. Comparatively, 12.3% of Computer Programs & Systems shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Verisign has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500. Comparatively, Computer Programs & Systems has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500.

Earnings & Valuation

This table compares Verisign and Computer Programs & Systems’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Verisign $1.21 billion 21.01 $582.48 million $4.75 45.10
Computer Programs & Systems $280.41 million 1.38 $17.04 million $1.94 13.91

Verisign has higher revenue and earnings than Computer Programs & Systems. Computer Programs & Systems is trading at a lower price-to-earnings ratio than Verisign, indicating that it is currently the more affordable of the two stocks.

Summary

Verisign beats Computer Programs & Systems on 11 of the 16 factors compared between the two stocks.

About Verisign

VeriSign, Inc. provides domain name registry services and Internet infrastructure in the United States and internationally. The company offers registry services that operate the authoritative directory of and/or the back-end systems for .com, .net, .cc, .tv, .gov, .jobs, .edu, .name, and other domain names. Its registry services allow individuals and organizations to establish their online identities. The company also provides root zone maintainer services. VeriSign, Inc. was founded in 1995 and is headquartered in Reston, Virginia.

About Computer Programs & Systems

Computer Programs and Systems, Inc. provides healthcare information technology solutions and services in the United States and the Caribbean nation of St. Maarten. Its software systems include patient management software that enables a hospital to identify a patient at various points in the healthcare delivery system, as well as to collect and maintain patient information throughout the process of patient care; and financial accounting software, which offers business office applications to track and coordinate information needed for managerial decision-making. The company also provides clinical software that automates record keeping and reporting for various clinical functions; patient care applications; and enterprise applications that support its products for use in various areas of the hospital. In addition, it offers Centriq, an intuitive user interface to centralize data from various care areas that provide the end user with a tool to view past and present patient information; and Classic, a platform for community hospitals and post-acute care facilities. Further, the company provides software solutions that promote data-driven clinical and financial outcomes for customers in the post-acute care industry; software application support, hardware maintenance, and education and related services; post-acute care support and maintenance services; revenue cycle management products and services, consulting and business management services, and managed information technology services; and system implementation and training services. It serves community hospitals and physician clinics, skilled nursing and assisted living facilities, and small specialty hospitals. Computer Programs and Systems, Inc. was founded in 1979 and is headquartered in Mobile, Alabama.

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