Paycom Software (NYSE: PAYC) and Talend (NASDAQ:TLND) are both technology companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, risk, analyst recommendations and valuation.

Institutional & Insider Ownership

88.4% of Paycom Software shares are owned by institutional investors. Comparatively, 45.7% of Talend shares are owned by institutional investors. 17.9% of Paycom Software shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for Paycom Software and Talend, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Paycom Software 0 5 11 0 2.69
Talend 0 0 6 0 3.00

Paycom Software currently has a consensus target price of $84.50, suggesting a potential upside of 4.64%. Talend has a consensus target price of $46.00, suggesting a potential upside of 24.36%. Given Talend’s stronger consensus rating and higher probable upside, analysts clearly believe Talend is more favorable than Paycom Software.

Earnings and Valuation

This table compares Paycom Software and Talend’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Paycom Software $329.14 million 14.29 $43.84 million $1.06 76.18
Talend $105.98 million 10.17 -$24.24 million ($0.87) -42.52

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

Profitability

This table compares Paycom Software and Talend’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Paycom Software 15.37% 44.27% 5.67%
Talend -18.23% -207.85% -15.66%

Summary

Paycom Software beats Talend on 11 of the 13 factors compared between the two stocks.

About Paycom Software

Paycom Software, Inc. is a provider of a cloud-based human capital management (HCM) software solution delivered as Software-as-a-Service (SaaS). The Company provides functionality and data analytics that businesses need to manage the complete employment life cycle from recruitment to retirement. The Company’s applications streamline client processes and provide clients and their employees with the ability to directly access and manage administrative processes, including applications that identify candidates, on-board employees, manage time and labor, administer payroll deductions and benefits, manage performance, terminate employees and administer post-termination health benefits, such as COBRA. The Company’s solution allows clients to analyze employee information to make business decisions. The Company’s HCM solution offers a range of applications, including talent acquisition, time and labor management, payroll, talent management and human resources (HR) management.

About Talend

Talend SA is a provider of open source integration solutions for data-oriented companies and integration platform under Apache Spark. The Company’s platform enables users to connect data and applications on-premise or in the cloud, in real time or in batch, Big Data or reference data. Its commercial products are Data Fabric, Big Data Integration, Real-Time Big Data, Data Preparation, Data Integration, Cloud Integration, Data Quality, Application Integration, Master Data Management and metadata Manager. Its free products are Data Preparation and Talend Open Studio, including Open Studio for Big Data, Open Studio for Data Integration, Open Studio for Data Quality, Open Studio for ESB and Open Studio for MDM. Its product, Talend Data Fabric, is a data platform. Talend Data Fabric combines big data, data integration, cloud, reference data management, data preparation and application integration in a single platform with a common development environment and management.

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