Critical Comparison: ExactTarget (ET) & Open Text (OTEX)

ExactTarget (NYSE: ET) and Open Text (NASDAQ:OTEX) are both technology companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, dividends and valuation.

Valuation and Earnings

This table compares ExactTarget and Open Text’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ExactTarget N/A N/A N/A ($0.91) N/A
Open Text $2.29 billion 3.73 $1.03 billion $0.57 56.46

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

Dividends

Open Text pays an annual dividend of $0.53 per share and has a dividend yield of 1.6%. ExactTarget does not pay a dividend. Open Text pays out 93.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider and Institutional Ownership

66.8% of Open Text shares are owned by institutional investors. 10.6% of Open Text shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares ExactTarget and Open Text’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ExactTarget N/A N/A N/A
Open Text 6.12% 6.53% 3.12%

Analyst Recommendations

This is a summary of current ratings for ExactTarget and Open Text, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ExactTarget 0 0 1 0 3.00
Open Text 2 1 7 0 2.50

ExactTarget presently has a consensus target price of $20.25, suggesting a potential upside of Infinity. Open Text has a consensus target price of $42.70, suggesting a potential upside of 32.69%. Given ExactTarget’s stronger consensus rating and higher probable upside, equities research analysts plainly believe ExactTarget is more favorable than Open Text.

Summary

Open Text beats ExactTarget on 9 of the 12 factors compared between the two stocks.

ExactTarget Company Profile

ExactTarget, Inc. is a global provider of cross-channel, interactive marketing software-as-a-service (SaaS) solutions. The Company’s solutions provide marketers with a suite of integrated applications. The Company’s suite of cross-channel, interactive marketing applications include e-mail, mobile, social media and sites, is built on its flexible multi-tenant SaaS platform. These channel applications are integrated with its campaign management, calendaring, dashboard, integrated reporting, marketing automation and data management tools. The Company also provides open application programming interfaces (APIs) and developer tools that allow third parties to embed its technology into their solutions and build applications on its platform. The Company generates revenue through the sale of subscriptions to its suite of cross-channel, interactive marketing SaaS solutions and the delivery of professional services. In October 2012, it acquired iGoDigital.

Open Text Company Profile

Open Text Corporation provides a platform and suite of software products and services that assist organizations in finding, utilizing, and sharing business information from any device. The Company designs, develops, markets and sells Enterprise Information Management (EIM) software and solutions. Its EIM offerings include Enterprise Content Management (ECM), Business Process Management (BPM), Customer Experience Management (CEM), Business Network, Discovery and Analytics. Its software and services allow organizations to manage the information that flows into, out of, and throughout the enterprise as part of daily operations. Its solutions incorporate collaborative and mobile technologies and are delivered for on-premises deployment, as well as through cloud, hybrid and managed hosted services models. In addition, the Company provides solutions that facilitate the exchange of information and transactions that occur between supply chain participants.

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