Guidance Software (NASDAQ: GUID) and CSG Systems International (NASDAQ:CSGS) are both small-cap technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, analyst recommendations, valuation and profitability.

Dividends

CSG Systems International pays an annual dividend of $0.79 per share and has a dividend yield of 1.9%. Guidance Software does not pay a dividend. CSG Systems International pays out 41.6% of its earnings in the form of a dividend.

Insider & Institutional Ownership

51.8% of Guidance Software shares are owned by institutional investors. Comparatively, 91.2% of CSG Systems International shares are owned by institutional investors. 38.1% of Guidance Software shares are owned by company insiders. Comparatively, 2.6% of CSG Systems International shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Guidance Software and CSG Systems International’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Guidance Software $108.61 million 1.99 -$971,000.00 ($0.25) -28.28
CSG Systems International $769.66 million 1.72 $144.79 million $1.90 21.56

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

Analyst Ratings

This is a summary of current ratings and price targets for Guidance Software and CSG Systems International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Guidance Software 0 3 4 0 2.57
CSG Systems International 0 0 1 0 3.00

Guidance Software presently has a consensus price target of $8.35, indicating a potential upside of 18.10%. CSG Systems International has a consensus price target of $47.00, indicating a potential upside of 14.72%. Given Guidance Software’s higher probable upside, analysts plainly believe Guidance Software is more favorable than CSG Systems International.

Profitability

This table compares Guidance Software and CSG Systems International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Guidance Software -4.73% -559.09% -6.73%
CSG Systems International 8.10% 24.76% 7.99%

Risk & Volatility

Guidance Software has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500. Comparatively, CSG Systems International has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Summary

CSG Systems International beats Guidance Software on 10 of the 15 factors compared between the two stocks.

About Guidance Software

Guidance Software, Inc. is a technology company. The Company is a provider of endpoint investigation solutions for cybersecurity analytics, security incident response, e-discovery, data privacy and forensic analysis. The Company has five segments, which include Products, Subscription, Professional services, Training and Maintenance. The Company’s Products segment includes EnCase, EnCase Endpoint Security, EnCase eDiscovery, EnCase Forensic, EnCase Portable, Premium License Support Program and hardware sales. Its Subscription segment includes subscription services for cloud-based document review and production software. Its Professional services segment performs consulting services and implementations. Its Training segment provides training classes, by which the Company trains its customers to use its software products. Its maintenance segment provides software updates, telephone and e-mail support.

About CSG Systems International

CSG Systems International, Inc. (CSG) is a provider of business support solutions primarily serving the communications industry. The Company provides business support solutions (BSS) to the communications service providers (CSPs), as well as clients in various industries. CSG’s solutions coordinate and manage various aspects of a service provider’s customer interactions, from the initial activation of customer accounts, to the support and fulfillment of various services, and through the calculation, presentment, and accounts receivables management of monthly customer statements. The Company’s primary product solutions include Revenue Management & Customer Experience Solutions; Customer Interaction Management; Managed Services; Mediation and Data Management, and Wholesale Settlement and Routing. The Company employs professional services across various sectors, including solution architecture, project management, systems implementation and business consultancy.

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