IMS Health (NYSE: IMS) and Science Applications International (NYSE:SAIC) are both mid-cap technology companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, profitability, institutional ownership, valuation, earnings and analyst recommendations.

Profitability

This table compares IMS Health and Science Applications International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
IMS Health 2.99% 5.62% 1.22%
Science Applications International 3.77% 50.26% 8.18%

Valuation and Earnings

This table compares IMS Health and Science Applications International’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
IMS Health N/A N/A N/A $0.42 74.62
Science Applications International $4.45 billion 0.75 $148.00 million $3.64 21.33

Science Applications International has higher revenue and earnings than IMS Health. Science Applications International is trading at a lower price-to-earnings ratio than IMS Health, indicating that it is currently the more affordable of the two stocks.

Dividends

Science Applications International pays an annual dividend of $1.24 per share and has a dividend yield of 1.6%. IMS Health does not pay a dividend. Science Applications International pays out 34.1% of its earnings in the form of a dividend.

Insider & Institutional Ownership

90.3% of IMS Health shares are owned by institutional investors. Comparatively, 63.5% of Science Applications International shares are owned by institutional investors. 2.5% of IMS Health shares are owned by insiders. Comparatively, 2.9% of Science Applications International shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings for IMS Health and Science Applications International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IMS Health 0 0 0 0 N/A
Science Applications International 0 2 5 0 2.71

Science Applications International has a consensus target price of $79.57, indicating a potential upside of 2.50%. Given Science Applications International’s higher possible upside, analysts clearly believe Science Applications International is more favorable than IMS Health.

Summary

Science Applications International beats IMS Health on 9 of the 11 factors compared between the two stocks.

IMS Health Company Profile

IMS Health Holdings, Inc. (IMS) is an information and technology services company that provides solutions to its clients in the healthcare industry. The Company has its presence in over 100 countries. The Company’s data set contains over 10 petabytes of data and over 500 million patient records. It serves healthcare organizations and life science companies, including pharmaceutical, biotechnology, consumer health and medical device manufacturers, as well as distributors, providers, payers, government agencies, policymakers, researchers and the financial community. The Company’s principal information offerings include national information offerings, sub-national information offerings and OneKey. Its technology services offerings include technology solutions, real-world evidence solutions, and workflow analytics and consulting services. It offers technology services that include data warehousing, information technology (IT) outsourcing, software applications and other services.

Science Applications International Company Profile

Science Applications International Corporation (SAIC) is a provider of technical, engineering and enterprise information technology (IT) services. The Company provides its services primarily to the United States Government, including the Department of Defense (DoD), the intelligence community and federal civilian agencies. The Company provides engineering, systems integration and information technology offerings for government projects, and offers a range of services with a targeted emphasis on higher-end, differentiated technology services. The Company’s offerings include engineering; technology and equipment platform integration; maintenance of ground and maritime systems; logistics; training and simulation; operation and program support services, and end-to-end services spanning the design, development, integration, deployment, management and operations, sustainment and security of its customers’ entire IT infrastructure.

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