Critical Review: Dassault Systemes (OTCMKTS:DASTY) and SS&C Technologies (NASDAQ:SSNC)

Dassault Systemes (OTCMKTS:DASTY) and SS&C Technologies (NASDAQ:SSNC) are both large-cap computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, risk, valuation, analyst recommendations, dividends and earnings.

Institutional and Insider Ownership

0.0% of Dassault Systemes shares are held by institutional investors. Comparatively, 96.9% of SS&C Technologies shares are held by institutional investors. 16.0% of SS&C Technologies shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Dassault Systemes and SS&C Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dassault Systemes	19.93%	18.26%	10.68%
SS&C Technologies	12.65%	20.15%	7.05%

Valuation & Earnings

This table compares Dassault Systemes and SS&C Technologies”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dassault Systemes	$7.05 billion	3.83	$1.35 billion	$1.06	18.97
SS&C Technologies	$6.27 billion	2.62	$796.90 million	$3.23	21.11

Dassault Systemes has higher revenue and earnings than SS&C Technologies. Dassault Systemes is trading at a lower price-to-earnings ratio than SS&C Technologies, indicating that it is currently the more affordable of the two stocks.

Dividends

Dassault Systemes pays an annual dividend of $0.23 per share and has a dividend yield of 1.1%. SS&C Technologies pays an annual dividend of $1.08 per share and has a dividend yield of 1.6%. Dassault Systemes pays out 21.7% of its earnings in the form of a dividend. SS&C Technologies pays out 33.4% 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. SS&C Technologies has increased its dividend for 9 consecutive years. SS&C Technologies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Dassault Systemes has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.Comparatively, SS&C Technologies has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Dassault Systemes and SS&C Technologies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dassault Systemes	1	3	1	1	2.33
SS&C Technologies	0	3	5	1	2.78

SS&C Technologies has a consensus price target of $96.13, suggesting a potential upside of 40.99%. Given SS&C Technologies’ stronger consensus rating and higher possible upside, analysts clearly believe SS&C Technologies is more favorable than Dassault Systemes.

Summary

SS&C Technologies beats Dassault Systemes on 11 of the 17 factors compared between the two stocks.

About Dassault Systemes

Dassault Systèmes SE provides software solutions and services worldwide. It offers SOLIDWORKS provides easy-to-use 2D and 3D product development solutions accessible to any business; CATIA, an engineering and design software for product 3D computer-aided design; GEOVIA for intersection of natural resources, infrastructure, and urban planning; and BIOVIA that develops chemicals, biologics, and materials experiences. The company provides SIMULIA that delivers realistic simulation applications; DELMIA, which enables global industrial operations; 3DVIA that provides 3D space planning solutions; and ENOVIA that enables to plan and track the definition of success for customer. In addition, it offers Centric PLM, a product lifecycle management software solution; 3DEXCITE, a real-time 3D visualization software; NETVIBES, which enables organizations to gather, align, and enrich big data; 3DEXPERIENCE platform that provides organizations a holistic and real-time view of their business activities and ecosystem, as well as connecting people, ideas, data, and solutions together in a single environment; and MEDIDATA, a clinical research study software that provides evidences and insights to pharmaceutical, biotech, medical device, and diagnostic companies, as well as academic researchers. The company distributes its products through direct and indirect sales channels. It primarily serves companies in the transportation and mobility; industrial equipment; aerospace and defense; high-tech; life sciences and healthcare; infrastructure, energy, and materials; home and lifestyle; architecture, engineering, and construction; cities, and public services; consumer packaged goods and retail; marine and offshore; and business services. Dassault Systèmes SE was incorporated in 1981 and is headquartered in Vélizy-Villacoublay, France.

About SS&C Technologies

SS&C Technologies Holdings, Inc. engages in the development and provision of software solutions to the financial services and healthcare industries. It operates through the following geographical segments: United States, Europe, Middle East and Africa, Asia Pacific and Japan, Canada, and the Americas, excluding the United States and Canada. Its products include advent genesis, antares, asset allocators, AWD, axys, BANC mall, BRIX, DST vision, evare, lightning, and moxy. The company was founded by William Charles Stone in March 1986 and is headquartered in Windsor, CT.