IHS Markit (NASDAQ:INFO) and Switch (NYSE:SWCH) are both business services companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, risk, profitability, valuation and institutional ownership.

Risk and Volatility

IHS Markit has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500. Comparatively, Switch has a beta of 0.28, indicating that its stock price is 72% less volatile than the S&P 500.

Profitability

This table compares IHS Markit and Switch’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
IHS Markit 14.57% 9.55% 5.07%
Switch -16.29% -1.84% -0.93%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for IHS Markit and Switch, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IHS Markit 1 4 11 0 2.63
Switch 0 5 7 0 2.58

IHS Markit presently has a consensus target price of $58.29, suggesting a potential upside of 14.53%. Switch has a consensus target price of $14.33, suggesting a potential upside of 97.16%. Given Switch’s higher probable upside, analysts plainly believe Switch is more favorable than IHS Markit.

Institutional & Insider Ownership

96.2% of IHS Markit shares are held by institutional investors. Comparatively, 19.1% of Switch shares are held by institutional investors. 2.7% of IHS Markit shares are held by company insiders. Comparatively, 12.6% of Switch shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares IHS Markit and Switch’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
IHS Markit $3.60 billion 5.57 $416.90 million $1.68 30.29
Switch $378.27 million 4.74 -$15.20 million N/A N/A

IHS Markit has higher revenue and earnings than Switch.

Dividends

Switch pays an annual dividend of $0.06 per share and has a dividend yield of 0.8%. IHS Markit does not pay a dividend.

Summary

IHS Markit beats Switch on 10 of the 13 factors compared between the two stocks.

IHS Markit Company Profile

IHS Markit Ltd. provides critical information, analytics, and solutions for various industries and markets that drive economies worldwide. The company's information, analytics, and solutions enhance operational efficiency and offer deep insights for customers in business, finance, and government. Its Resources segment provides upstream, midstream, downstream, and power/gas/coal/renewables services. This segment also offers data for manufacturing processes, as well as capital expenditure, cost, price, production, trade, demand, and capacity industry analysis and forecasts. The company's Transportation segment provides authoritative analysis, as well as sales and production forecasts for light vehicles, medium and heavy commercial vehicles, powertrains, components, and technology systems; and performance measurement tools and marketing solutions for car makers, dealers, and agencies. It also offers comprehensive data on ships, as well as monthly import and export statistics on approximately 90 countries; and specifications for military vehicles, naval vessels, and aircraft types. The company's Consolidated Markets & Solutions segment provides content and analytics on engineering and technical standards, codes, specifications, handbooks, reference books, journals, and other scientific and technical documents, as well as software-based engineering decision engines; components and devices, performance analytics, and end market intelligence for technology, media, and telecom industries; and economic and risk data, forecast, and analytic tools. Its Financial Services segment provides pricing and reference data, indices, valuation and trading services, trade processing, enterprise software, and managed services to traders, portfolio managers, risk managers, research professionals, and other financial markets participants, as well as operations, compliance, and enterprise data managers. IHS Markit Ltd. was founded in 1959 and is headquartered in London, the United Kingdom.

Switch Company Profile

Switch, Inc., through its subsidiary, Switch, Ltd., provides colocation space and related services to technology and digital media companies, cloud and managed service providers, financial institutions, and telecommunications providers that conduct critical business on the Internet. The company develops and operates data centers in Nevada, Michigan, and Georgia. Switch, Inc. was founded in 2000 and is headquartered in Las Vegas, Nevada.

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