Jack Henry & Associates (NASDAQ: JKHY) and Computer Programs & Systems (NASDAQ:CPSI) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, risk, valuation, dividends, profitability, earnings and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Jack Henry & Associates and Computer Programs & Systems, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Jack Henry & Associates 0 3 1 0 2.25
Computer Programs & Systems 1 4 1 0 2.00

Jack Henry & Associates currently has a consensus target price of $110.50, indicating a potential downside of 10.44%. Computer Programs & Systems has a consensus target price of $29.40, indicating a potential downside of 2.81%. Given Computer Programs & Systems’ higher possible upside, analysts clearly believe Computer Programs & Systems is more favorable than Jack Henry & Associates.

Profitability

This table compares Jack Henry & Associates and Computer Programs & Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Jack Henry & Associates 17.08% 23.92% 13.64%
Computer Programs & Systems 2.32% 10.01% 4.63%

Risk & Volatility

Jack Henry & Associates has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500. Comparatively, Computer Programs & Systems has a beta of 0.13, meaning that its stock price is 87% less volatile than the S&P 500.

Earnings & Valuation

This table compares Jack Henry & Associates and Computer Programs & Systems’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Jack Henry & Associates $1.43 billion 6.66 $245.79 million $3.17 38.92
Computer Programs & Systems $267.27 million 1.56 $3.89 million $0.45 67.22

Jack Henry & Associates has higher revenue and earnings than Computer Programs & Systems. Jack Henry & Associates is trading at a lower price-to-earnings ratio than Computer Programs & Systems, indicating that it is currently the more affordable of the two stocks.

Dividends

Jack Henry & Associates pays an annual dividend of $1.24 per share and has a dividend yield of 1.0%. Computer Programs & Systems pays an annual dividend of $0.40 per share and has a dividend yield of 1.3%. Jack Henry & Associates pays out 39.1% of its earnings in the form of a dividend. Computer Programs & Systems pays out 88.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Computer Programs & Systems has raised its dividend for 14 consecutive years. Computer Programs & Systems is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

89.0% of Jack Henry & Associates shares are held by institutional investors. Comparatively, 95.3% of Computer Programs & Systems shares are held by institutional investors. 0.8% of Jack Henry & Associates shares are held by company insiders. Comparatively, 3.7% of Computer Programs & Systems shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Jack Henry & Associates beats Computer Programs & Systems on 10 of the 16 factors compared between the two stocks.

About Jack Henry & Associates

Jack Henry & Associates, Inc. is a provider of information processing solutions for community banks. The Company offers a range of products and services, including processing transactions, automating business processes, and managing information financial institutions and diverse corporate entities. It operates in two segments: bank systems and services (Bank) and credit union systems and services (Credit Union). It provides its products and services through approximately three business brands, which include Jack Henry Banking, Symitar and ProfitStars. The Core software system consists of the integrated applications required to process deposit, loan, and general ledger transactions, and to maintain centralized customer/member information. Jack Henry Banking markets over three software systems to banks and Symitar markets over two software systems to credit unions. Its subsidiaries include Jack Henry Services, Inc., Symitar Systems, Inc. and Bayside Business Solutions, Inc.

About Computer Programs & Systems

Computer Programs and Systems, Inc. (CPSI) is a provider of healthcare information technology (IT) solutions for rural and community hospitals, and post-acute care facilities. The Company’s segments include acute care EHR, post-acute care EHR, and TruBridge, Rycan, and other outsourcing. Its Acute Care EHR segment consists of acute care software solutions and supports sales generated by its subsidiaries, Evident, LLC (Evident) and Healthland Inc. (Healthland). Its Post-acute Care EHR segment consists of post-acute care software solutions and support sales generated by American HealthTech, Inc. (AHT). Its TruBridge, Rycan, and Other Outsourcing segment primarily consists of business management, consulting and managed IT services sales generated by TruBridge, LLC (TruBridge) and the sale of Rycan Technologies, Inc.’s (Rycan’s) revenue cycle management workflow and automation software.

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