Mattersight (NASDAQ: MATR) and Leidos (NYSE:LDOS) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Profitability

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This table compares Mattersight and Leidos’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mattersight -35.09% N/A -31.41%
Leidos 3.60% 17.47% 6.38%

Dividends

Leidos pays an annual dividend of $1.28 per share and has a dividend yield of 1.9%. Mattersight does not pay a dividend. Leidos pays out 34.4% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent recommendations and price targets for Mattersight and Leidos, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mattersight 0 1 0 0 2.00
Leidos 0 1 7 0 2.88

Mattersight presently has a consensus price target of $2.75, indicating a potential upside of 29.72%. Leidos has a consensus price target of $72.13, indicating a potential upside of 9.25%. Given Mattersight’s higher possible upside, equities analysts clearly believe Mattersight is more favorable than Leidos.

Institutional and Insider Ownership

43.1% of Mattersight shares are held by institutional investors. Comparatively, 73.2% of Leidos shares are held by institutional investors. 28.3% of Mattersight shares are held by company insiders. Comparatively, 1.1% of Leidos shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Mattersight has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500. Comparatively, Leidos has a beta of 1.6, suggesting that its stock price is 60% more volatile than the S&P 500.

Valuation & Earnings

This table compares Mattersight and Leidos’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mattersight $46.51 million 1.51 -$16.32 million ($0.49) -4.33
Leidos $10.17 billion 0.98 $366.00 million $3.72 17.75

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

Summary

Leidos beats Mattersight on 12 of the 16 factors compared between the two stocks.

Mattersight Company Profile

Mattersight Corporation provides behavioral analytics services in the United States. The company provides predictive behavioral routing and workstyle, performance management, quality assurance, predictive analytics, and marketing managed services that analyzes and predicts customer behavior based on the language exchanged between agents and customers during brand interactions to enhance customer satisfaction and retention, employee engagement, and operating efficiency. It serves companies in the healthcare, insurance, financial service, technology, telecommunication, cable, utility, education, hospitality, and government industries. The company was formerly known as eLoyalty Corporation and changed its name to Mattersight Corporation in May 2011. Mattersight Corporation was founded in 1994 and is headquartered in Chicago, Illinois.

Leidos Company Profile

Leidos Holdings, Inc. provides services and solutions in the defense, intelligence, civil, and health markets primarily in the United States. The company operates through three segments: Defense Solutions, Civil, and Health. The Defense Solutions segment offers national security solutions and systems for air, land, sea, space, and cyberspace for the U.S. intelligence community, Department of Defense, military services, the U.S. Department of Homeland Security, and government agencies of U.S. allies abroad, as well as other federal, civilian, and commercial customers in national security industry. Its solutions include technology, intelligence systems, command and control, data analytics, logistics, and cybersecurity solutions, as well as intelligence analysis and operations support services to critical missions. The Civil segment provides systems integration services to Air Navigation Service providers, including the Federal Aviation Administration, Transportation Security Administration, and airport operators; vehicle and cargo inspection system, which enables the scanning of vehicles and cargo that produces a image using a low radiation dose; IT solutions in cloud computing, mobility, application modernization, DevOps, data center, network modernization, asset management, help desk operations, and digital workplace enablement; federal environment and infrastructure; and logistics services. The Health segment offers solutions to federal and commercial customers responsible for health and well-being of people worldwide, including complex systems integration, managed health services, enterprise IT transformation, and life sciences services. The company was founded in 1969 and is headquartered in Reston, Virginia.

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