Science Applications International (SAIC) & Aspen Technology (AZPN) Critical Comparison

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

Insider and Institutional Ownership

63.5% of Science Applications International shares are owned by institutional investors. 2.9% of Science Applications International shares are owned by insiders. Comparatively, 0.8% of Aspen Technology shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Science Applications International 3.77% 48.69% 8.12%
Aspen Technology 33.35% -66.74% 67.34%

Earnings & Valuation

This table compares Science Applications International and Aspen Technology’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Science Applications International $4.45 billion 0.71 $148.00 million $3.58 20.41
Aspen Technology $482.94 million 10.03 $162.19 million $2.15 31.05

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

Analyst Ratings

This is a breakdown of current ratings and price targets for Science Applications International and Aspen Technology, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Science Applications International 0 3 4 0 2.57
Aspen Technology 0 5 2 0 2.29

Science Applications International presently has a consensus target price of $80.71, indicating a potential upside of 10.46%. Aspen Technology has a consensus target price of $62.43, indicating a potential downside of 6.49%. Given Science Applications International’s stronger consensus rating and higher probable upside, research analysts plainly believe Science Applications International is more favorable than Aspen Technology.

Volatility & Risk

Science Applications International has a beta of 1.6, indicating that its stock price is 60% more volatile than the S&P 500. Comparatively, Aspen Technology has a beta of 1.23, indicating that its stock price is 23% more volatile than the S&P 500.

Dividends

Science Applications International pays an annual dividend of $1.24 per share and has a dividend yield of 1.7%. Aspen Technology does not pay a dividend. Science Applications International pays out 34.6% of its earnings in the form of a dividend.

Summary

Science Applications International beats Aspen Technology on 10 of the 16 factors compared between the two stocks.

About Science Applications International

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.

About Aspen Technology

Aspen Technology, Inc. is a global provider of process optimization software solutions designed to manage and optimize plant and process design, operational performance, and supply chain planning. The Company’s aspenONE software and related services have been developed specifically for companies in the process industries, including the energy, chemicals, and engineering and construction industries. It operates through two segments, including subscription and software, which provides licensing of process optimization software solutions and associated support services, and services, which includes professional services and training. It has developed applications to design and optimize processes across the business areas, including engineering, manufacturing and supply chain. Its products include Aspen HYSYS, Aspen Economic Evaluation, Aspen Info Plus.21, Aspen PIMS Advanced Optimization, Aspen Collaborative Demand Manager and Aspen Supply Planner.

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