Comparing Formula Systems (1985) (NASDAQ:FORTY) & Indra Sistemas (OTCMKTS:ISMAY)

Formula Systems (1985) (NASDAQ:FORTY) and Indra Sistemas (OTCMKTS:ISMAY) are both technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, dividends, valuation, profitability and institutional ownership.

Dividends

Formula Systems (1985) pays an annual dividend of $2.40 per share and has a dividend yield of 2.0%. Indra Sistemas pays an annual dividend of $0.10 per share and has a dividend yield of 0.3%. Formula Systems (1985) pays out 6.0% of its earnings in the form of a dividend. Indra Sistemas pays out 6.1% 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. Formula Systems (1985) is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Formula Systems (1985) has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500. Comparatively, Indra Sistemas has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500.

Profitability

This table compares Formula Systems (1985) and Indra Sistemas’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Formula Systems (1985)	21.57%	4.38%	2.13%
Indra Sistemas	7.70%	23.84%	4.67%

Earnings and Valuation

This table compares Formula Systems (1985) and Indra Sistemas”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Formula Systems (1985)	$2.93 billion	0.63	$606.48 million	$39.83	3.04
Indra Sistemas	$6.17 billion	1.84	$493.10 million	$1.65	19.45

Formula Systems (1985) has higher earnings, but lower revenue than Indra Sistemas. Formula Systems (1985) is trading at a lower price-to-earnings ratio than Indra Sistemas, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations for Formula Systems (1985) and Indra Sistemas, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Formula Systems (1985)	0	1	0	0	2.00
Indra Sistemas	0	0	1	0	3.00

Institutional & Insider Ownership

34.8% of Formula Systems (1985) shares are owned by institutional investors. 23.3% of Formula Systems (1985) shares are owned by company insiders. Comparatively, 0.3% of Indra Sistemas shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Formula Systems (1985) beats Indra Sistemas on 8 of the 15 factors compared between the two stocks.

About Formula Systems (1985)

Formula Systems (1985) Ltd. is an Israel-based holding company focused on software and information technology services. Through its subsidiaries, it provides software development, systems integration, IT consulting and outsourcing, and business software for areas including insurance and financial services. Its principal subsidiaries include Matrix IT, Sapiens International and Magic Software Enterprises. Their offerings span technology services and digital solutions, insurance and financial software, and application development and integration platforms.

About Indra Sistemas

Indra Sistemas is a Spanish technology and consulting company that develops solutions for government agencies and businesses. Its digital services, delivered in part through its Minsait business, include consulting, information technology and systems integration. The company also works in defense and security, air traffic management, transportation and mobility, and space. Its offerings include mission and command systems, air traffic control technologies, and systems for managing rail and road networks.