Comparing Nice Systems (NASDAQ:NICE) and RealNetworks (RNWK)

Nice Systems (NASDAQ: NICE) and RealNetworks (NASDAQ:RNWK) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, dividends, profitability, risk and valuation.

Risk and Volatility

Nice Systems has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, RealNetworks has a beta of 0.55, suggesting that its stock price is 45% less volatile than the S&P 500.

Profitability

This table compares Nice Systems and RealNetworks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nice Systems 7.99% 11.14% 6.91%
RealNetworks -20.48% -36.41% -24.73%

Analyst Recommendations

This is a summary of recent ratings and price targets for Nice Systems and RealNetworks, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nice Systems 0 4 3 0 2.43
RealNetworks 0 0 1 0 3.00

Nice Systems currently has a consensus target price of $80.50, indicating a potential upside of 8.27%. RealNetworks has a consensus target price of $6.50, indicating a potential upside of 58.15%. Given RealNetworks’ stronger consensus rating and higher possible upside, analysts clearly believe RealNetworks is more favorable than Nice Systems.

Insider and Institutional Ownership

43.7% of Nice Systems shares are owned by institutional investors. Comparatively, 50.5% of RealNetworks shares are owned by institutional investors. 0.0% of Nice Systems shares are owned by insiders. Comparatively, 39.5% of RealNetworks shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Nice Systems pays an annual dividend of $0.39 per share and has a dividend yield of 0.5%. RealNetworks does not pay a dividend. Nice Systems pays out 25.3% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Nice Systems and RealNetworks’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Nice Systems $1.18 billion 3.79 $250.82 million $1.54 48.28
RealNetworks $126.19 million 1.21 -$17.23 million ($0.69) -5.96

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

Summary

Nice Systems beats RealNetworks on 10 of the 15 factors compared between the two stocks.

About Nice Systems

NICE Ltd., formerly NICE-Systems Ltd., is a global enterprise software provider. The Company’s segments include Customer Interactions Solutions, and Financial Crime and Compliance Solutions. The Customer Interactions Solutions segment provides data driven insights that enable businesses to deliver personalized experience to customers. The Financial Crime and Compliance Solutions segment provides real time and cross-channel fraud prevention, anti-money laundering, brokerage compliance and enterprise-wide case management. The Company serves contact centers, back office operations and retail branches, covering various industries, including communications, banking, insurance, healthcare, business processes outsourcing (BPO), government, utilities, travel and entertainment. Its Multi-Channel Recording and Interaction Management enables organizations to capture structured and unstructured customer interaction and transaction data from multiple channels.

About RealNetworks

RealNetworks, Inc. creates applications and services that enable to connect with digital media. The Company connects consumers with their digital media directly and through partners, focusing on supporting various network, devices, media types and social networks. It operates through three segments: Consumer Media, Mobile Services and Games. Within its Consumer Media business, its RealPlayer media player software includes features and services that enable consumers to discover, play, download, manage and edit digital video, stream audio and video, download and save photos and videos from the Web, transfer and share content on social networks, and edit their own photo and video content. The Mobile Services segment consists of digital media services it provides to mobile and online service providers as software as a service offerings. It develops, publishes, licenses and distributes casual games.

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