Verisk Analytics (NASDAQ: VRSK) and BroadSoft (NASDAQ:BSFT) are both business services companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, risk, dividends, earnings and profitability.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Verisk Analytics and BroadSoft, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Verisk Analytics 0 9 3 0 2.25
BroadSoft 0 3 6 0 2.67

Verisk Analytics presently has a consensus target price of $85.73, indicating a potential upside of 7.60%. BroadSoft has a consensus target price of $47.00, indicating a potential upside of 9.30%. Given BroadSoft’s stronger consensus rating and higher probable upside, analysts plainly believe BroadSoft is more favorable than Verisk Analytics.

Insider and Institutional Ownership

94.1% of Verisk Analytics shares are owned by institutional investors. 3.4% of Verisk Analytics shares are owned by insiders. Comparatively, 1.5% of BroadSoft shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

Verisk Analytics has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500. Comparatively, BroadSoft has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500.

Earnings and Valuation

This table compares Verisk Analytics and BroadSoft’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Verisk Analytics $2.03 billion 6.46 $941.60 million $2.74 29.08
BroadSoft $354.53 million 3.76 $24.27 million ($0.29) -148.28

Verisk Analytics has higher revenue and earnings than BroadSoft. BroadSoft is trading at a lower price-to-earnings ratio than Verisk Analytics, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Verisk Analytics and BroadSoft’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Verisk Analytics 22.99% 38.43% 11.47%
BroadSoft -2.34% 4.72% 2.23%

Summary

Verisk Analytics beats BroadSoft on 9 of the 14 factors compared between the two stocks.

About Verisk Analytics

Verisk Analytics, Inc. is a data analytics provider serving customers in insurance, natural resources and financial services. The Company operates through two segments: Risk Assessment and Decision Analytics. Its Risk Assessment segment serves its property and casualty insurance customers and focuses on prediction of loss, selection and pricing of risk, and compliance with their reporting requirements in each United States state in which they operate. In the Decision Analytics segment, the Company develops predictive models to forecast scenarios and produce both standard and customized analytics that help its customers manage their businesses, including predicting loss, selecting and pricing risk, detecting fraud before and after a loss event, and quantifying losses. It offers predictive analytics and decision support solutions to customers in rating, underwriting, claims, catastrophe and weather risk, natural resources intelligence, economic forecasting and various other fields.

About BroadSoft

BroadSoft, Inc. is a global provider of software and services that enable telecommunications service providers to deliver hosted, cloud-based Unified Communications (UC) to their enterprise customers. The BroadSoft Business solution is a communications and collaboration offering that enables telecommunications service providers to offer businesses and other enterprises UC features and functionalities on a cloud-delivered basis without the need for traditional premise-based private branch exchange (PBX) equipment. BroadSoft Business includes its UC-One, Team-One and CC-One applications. The capabilities of the BroadSoft Business offering can be accessed through desk phones, smartphones, tablets, laptops and personal computers. Its BroadWorks SIP Trunking solution enables service providers to provide Internet protocol (IP) interconnectivity and additional services to enterprises that already have premise-based PBXs. Its training services include systems administration and provisioning.

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