Sabre (SABR) & Check Point Software Technologies (CHKP) Critical Analysis

Sabre (NASDAQ: SABR) and Check Point Software Technologies (NASDAQ:CHKP) are both mid-cap technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, dividends, risk and profitability.

Insider and Institutional Ownership

71.7% of Check Point Software Technologies shares are owned by institutional investors. 1.0% of Sabre shares are owned by insiders. Comparatively, 29.0% of Check Point Software Technologies shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Sabre has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500. Comparatively, Check Point Software Technologies has a beta of 0.62, indicating that its stock price is 38% less volatile than the S&P 500.

Dividends

Sabre pays an annual dividend of $0.56 per share and has a dividend yield of 2.7%. Check Point Software Technologies does not pay a dividend. Sabre pays out 81.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a breakdown of current recommendations for Sabre and Check Point Software Technologies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sabre 2 2 5 0 2.33
Check Point Software Technologies 0 17 9 0 2.35

Sabre currently has a consensus price target of $22.63, suggesting a potential upside of 9.67%. Check Point Software Technologies has a consensus price target of $114.05, suggesting a potential upside of 10.08%. Given Check Point Software Technologies’ stronger consensus rating and higher probable upside, analysts clearly believe Check Point Software Technologies is more favorable than Sabre.

Earnings & Valuation

This table compares Sabre and Check Point Software Technologies’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sabre $3.37 billion 1.68 $242.56 million $0.69 29.90
Check Point Software Technologies $1.74 billion 9.72 $724.84 million $4.68 22.14

Check Point Software Technologies has lower revenue, but higher earnings than Sabre. Check Point Software Technologies is trading at a lower price-to-earnings ratio than Sabre, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Sabre and Check Point Software Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sabre 5.22% 53.97% 6.12%
Check Point Software Technologies 42.80% 22.46% 15.11%

Summary

Check Point Software Technologies beats Sabre on 11 of the 16 factors compared between the two stocks.

About Sabre

Sabre Corporation is a technology solutions provider to the global travel and tourism industry. The Company provides software and services to a range of travel suppliers and travel buyers. The Company operates through two business segments: Travel Network, and Airline and Hospitality Solutions. Travel Network is its global business-to-business travel marketplace and consists primarily of its global distribution system (GDS) and a set of solutions that integrate with its GDS to serve travel suppliers and travel buyers. Its Airline and Hospitality Solutions business offers a portfolio of software technology products and solutions, through software-as-a-service (SaaS) and hosted delivery model, to airlines, hoteliers and other travel suppliers. The Company connects travel suppliers, including airlines, hotels, car rental brands, rail carriers, cruise lines and tour operators, with travel buyers in a travel marketplace.

About Check Point Software Technologies

Check Point Software Technologies Ltd. (Check point) develops, markets and supports a range of products and services for information technology (IT) security. The Company’s products and services are sold to enterprises, service providers, small and medium sized businesses and consumers. It offers enterprises a platform to deploy independent, modular and interoperable security applications (Software Blades), such as firewall, virtual private network (VPN), intrusion prevention system (IPS), Application Control, Anti-Bot, antivirus, data loss prevention (DLP), policy management, event analysis or multi-domain management. The Company offers Software Blades grouped into functional packages to address specific security issues. It has product offerings under these packages, which include Next Generation Firewall, Next Generation Threat Prevention, Next Generation Secure Web Gateway and Next Generation Data Protection.

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