Comparing Constellation Software (OTCMKTS:CNSWF) & Adobe (NASDAQ:ADBE)

Constellation Software (OTCMKTS:CNSWF) and Adobe (NASDAQ:ADBE) are both large-cap technology companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, profitability, valuation, dividends and risk.

Risk and Volatility

Constellation Software has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500. Comparatively, Adobe has a beta of 1.42, suggesting that its share price is 42% more volatile than the S&P 500.

Profitability

This table compares Constellation Software and Adobe’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Constellation Software	7.60%	47.37%	12.80%
Adobe	28.05%	65.65%	25.54%

Analyst Ratings

This is a summary of current ratings and target prices for Constellation Software and Adobe, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Constellation Software	0	1	6	1	3.00
Adobe	5	21	7	0	2.06

Adobe has a consensus price target of $282.68, suggesting a potential upside of 13.56%. Given Adobe’s higher possible upside, analysts plainly believe Adobe is more favorable than Constellation Software.

Institutional and Insider Ownership

81.8% of Adobe shares are owned by institutional investors. 0.2% of Adobe 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 Constellation Software and Adobe”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Constellation Software	$11.62 billion	3.72	$512.00 million	$45.33	44.96
Adobe	$23.77 billion	4.16	$7.13 billion	$17.92	13.89

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

Summary

Adobe beats Constellation Software on 11 of the 15 factors compared between the two stocks.

About Constellation Software

Constellation Software Inc., together with its subsidiaries, acquires, builds, and manages vertical market software businesses in Canada, the United States, Europe, and internationally. It provides mission critical software solutions for public and private sector markets. The company is also involved in the software licensing; and sale of third-party hardware. In addition, it offers professional, and maintenance and other recurring services. Constellation Software Inc. was incorporated in 1995 and is headquartered in Toronto, Canada.

About Adobe

Adobe Inc., together with its subsidiaries, operates as a diversified software company worldwide. It operates through three segments: Digital Media, Digital Experience, and Publishing and Advertising. The Digital Media segment offers products, services, and solutions that enable individuals, teams, and enterprises to create, publish, and promote content; and Document Cloud, a unified cloud-based document services platform. Its flagship product is Creative Cloud, a subscription service that allows members to access its creative products. This segment serves content creators, students, workers, marketers, educators, enthusiasts, and communicators. The Digital Experience segment provides an integrated platform and set of applications and services that enable brands and businesses to create, manage, execute, measure, monetize, and optimize customer experiences from analytics to commerce. This segment serves marketers, advertisers, agencies, publishers, merchandisers, merchants, web analysts, data scientists, developers, and executives across the C-suite. The Publishing and Advertising segment offers products and services, such as e-learning solutions, technical document publishing, web conferencing, document and forms platform, web application development, and high-end printing, as well as Advertising Cloud offerings. It also provides consulting, technical support, and learning services. The company offers its products and services directly to enterprise customers through its sales force and local field offices, as well as to end users through app stores and through its website at adobe.com. It also distributes products and services through distributors, value-added resellers, systems integrators, software vendors and developers, retailers, and original equipment manufacturers. The company was formerly known as Adobe Systems Incorporated and changed its name to Adobe Inc. in October 2018. Adobe Inc. was founded in 1982 and is headquartered in San Jose, California.