ConvergeOne (CVON) and CA (CA) Critical Survey

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

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for CA and ConvergeOne, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CA 0 7 0 0 2.00
ConvergeOne 0 5 1 0 2.17

CA currently has a consensus price target of $37.83, suggesting a potential downside of 14.87%. ConvergeOne has a consensus price target of $11.67, suggesting a potential upside of ?. Given ConvergeOne’s stronger consensus rating and higher probable upside, analysts clearly believe ConvergeOne is more favorable than CA.

Valuation and Earnings

This table compares CA and ConvergeOne’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CA $4.24 billion 4.39 $476.00 million $2.32 19.16
ConvergeOne $918.93 million 0.00 $290,000.00 $0.38 N/A

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

Volatility and Risk

CA has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500. Comparatively, ConvergeOne has a beta of 0.45, meaning that its share price is 55% less volatile than the S&P 500.

Insider and Institutional Ownership

69.7% of CA shares are owned by institutional investors. Comparatively, 22.7% of ConvergeOne shares are owned by institutional investors. 0.9% of CA shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares CA and ConvergeOne’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CA 11.19% 15.11% 7.46%
ConvergeOne 1.60% -76.41% 9.16%

Dividends

CA pays an annual dividend of $1.02 per share and has a dividend yield of 2.3%. ConvergeOne pays an annual dividend of $0.08 per share. CA pays out 44.0% of its earnings in the form of a dividend. ConvergeOne pays out 21.1% 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. CA has increased its dividend for 3 consecutive years. CA is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

CA beats ConvergeOne on 10 of the 16 factors compared between the two stocks.

CA Company Profile

CA, Inc., doing business as CA technologies, develops, markets, delivers, and licenses software products and services in the United States and internationally. It operates through three segments: Mainframe Solutions, Enterprise Solutions, and Services. The Mainframe Solutions segment offers solutions for the IBM z Systems platform, which runs various mission critical business applications. Its mainframe solutions enable customers enhance economics by increasing throughput and lowering cost per transaction; increasing business agility through DevOps tooling and processes; increasing reliability and availability of operations through machine intelligence and automation solutions; and protecting enterprise data with security and compliance. The Enterprise Solutions segment provides a range of software planning, development, and management tools for mobile, cloud, and distributed computing environments. It primarily provides customers secure application development, infrastructure management, automation, and identity-centric security solutions. The Services segment offers various services, such as consulting, implementation, application management, education, and support services to commercial and government customers for implementation and adoption of its software solutions. The company serves banks, insurance companies, other financial services providers, government agencies, information technology service providers, telecommunication providers, transportation companies, manufacturers, technology companies, retailers, educational organizations, and health care institutions. It sells its products through direct sales force, as well as through various partner channels comprising resellers, service providers, system integrators, managed service providers, and technology partners. The company was formerly known as Computer Associates International, Inc. and changed its name to CA, Inc. in 2006. CA, Inc. was founded in 1974 and is headquartered in New York, New York.

ConvergeOne Company Profile

ConvergeOne Holdings, Inc. provides collaboration and technology solutions for large and medium enterprises in the United States. The company offers unified communications solutions, including communications applications, such as voice, email, presence, chat/text, and video technologies; voice and text messaging solutions; mobility and bring your own device solutions for business continuity with the seamless connection of mobile, landline, cellular, and Wi-Fi enabled devices; conferencing solutions, as well as streaming and recording, and security services; and software integration services. It also provides customer engagement solutions comprising omni-channel, self-service interactive voice recognition and advanced routing, social media, remote agent, end-to-end business intelligence and analytics, workforce optimization, and integration software and cloud connector solutions; and enterprise networking technology solutions, such as mobile device management, routing and switching technology, wireless, and location service applications. In addition, the company offers data center solutions, including design, procurement, implementation, management, and optimization of data center infrastructure assets, as well as server migration and consolidation services; storage management and data management solutions; and virtualization solutions. Further, it provides cloud solutions in private, C1 Cloud, hybrid, and public cloud environments; end-to-end network and data security solutions; and disaster recovery services and solutions, such as business continuity assessment and planning, network availability and data continuity, and recovery and crisis management, as well as FireStorm POV, an security assessment tool. ConvergeOne Holdings, Inc. is headquartered in Eagan, Minnesota.

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