Critical Comparison: Verisk Analytics (VRSK) and RingCentral (RNG)

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for Verisk Analytics and RingCentral, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Verisk Analytics 1 6 6 0 2.38
RingCentral 0 3 10 0 2.77

Verisk Analytics presently has a consensus target price of $103.23, suggesting a potential downside of 1.29%. RingCentral has a consensus target price of $64.83, suggesting a potential downside of 15.69%. Given Verisk Analytics’ higher probable upside, analysts clearly believe Verisk Analytics is more favorable than RingCentral.

Profitability

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

Net Margins Return on Equity Return on Assets
Verisk Analytics 26.05% 31.75% 10.10%
RingCentral -3.99% -9.90% -4.62%

Valuation and Earnings

This table compares Verisk Analytics and RingCentral’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Verisk Analytics $2.15 billion 8.06 $555.10 million $3.21 32.58
RingCentral $501.53 million 12.06 -$26.14 million ($0.35) -219.71

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

Institutional & Insider Ownership

93.5% of Verisk Analytics shares are held by institutional investors. Comparatively, 75.0% of RingCentral shares are held by institutional investors. 3.2% of Verisk Analytics shares are held by insiders. Comparatively, 12.0% of RingCentral shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

Verisk Analytics has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500. Comparatively, RingCentral has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500.

Summary

Verisk Analytics beats RingCentral on 9 of the 13 factors compared between the two stocks.

Verisk Analytics Company Profile

Verisk Analytics, Inc. provides data analytics solutions for customers in the insurance, energy, and financial markets in the United States and internationally. Its Decision Analytics segment develops predictive models to forecast scenarios, and produce standard and customized analytics for predicting loss, selecting and pricing risk, detecting fraud before and after a loss event, and quantifying losses. It provides fraud-detection tools for the property and casualty (P&C) insurance industry; data analytics for energy, chemicals, and metals and mining industries; and data and information services that enable enhanced compliance with environmental health and safety, as well as helps businesses and governments to anticipate and manage climate-and weather-related risks. The company's Risk Assessment segment offers solutions to P&C insurance customers and focuses on prediction of loss, and selection and pricing of risk. Its solutions include industry-standard insurance programs that help P&C insurers in defining coverage and issue policies; actuarial services to help its customers analyze and price their risks; and customized services that include assisting with the development of independent insurance programs, analysis of their own underwriting experience, development of classification systems and rating plans, and other business decisions, as well as supplies information to various customers in other markets. This segment's solutions also comprise property-specific rating and underwriting information on properties, businesses, and communities to evaluate, price, and process commercial insurance applications, including property, auto, general liability, business owner's policy, and workers compensation. The company was founded in 1971 and is headquartered in Jersey City, New Jersey.

RingCentral Company Profile

RingCentral, Inc. provides software-as-a-service solutions for business communications and collaboration primarily in the United States. The company's products include RingCentral Office, a multi-tenant, multi-location, and enterprise-grade communications and collaboration solution that enables employees to communicate through voice, text, team messaging and collaboration, and HD video and Web conferencing through smartphones, tablets, PCs, and desk phones for businesses, which require a communications solution; RingCentral Professional, an inbound call routing subscription with additional text and fax capabilities primarily for smaller businesses; and RingCentral Fax solution that offers Internet fax capabilities, which allow businesses to send and receive fax documents without the need for a fax machine. Its products also comprise RingCentral Contact Center that provides a cloud based contact center solution, which delivers omni-channel capabilities; and RingCentral Glip, a team messaging and collaboration solution that allows a range of teams to stay connected through various modes of communication through an integration with RingCentral Office. RingCentral, Inc. serves a range of industries, including financial services, healthcare, legal services, real estate, retail, technology, insurance, construction, hospitality, and state and local government, as well as others. The company sells its products through a network of direct sales representatives, as well as sales agents and channel partners. RingCentral, Inc. was founded in 1999 and is headquartered in Belmont, California.

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