Inovalon (INOV) versus DST Systems (DST) Critical Contrast

Inovalon (NASDAQ:INOV) and DST Systems (NYSE:DST) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Institutional & Insider Ownership

32.8% of Inovalon shares are held by institutional investors. Comparatively, 85.7% of DST Systems shares are held by institutional investors. 50.9% of Inovalon shares are held by company insiders. Comparatively, 1.8% of DST Systems shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Inovalon and DST Systems, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Inovalon 1 1 0 0 1.50
DST Systems 0 3 0 0 2.00

Inovalon currently has a consensus target price of $10.50, indicating a potential downside of 20.15%. DST Systems has a consensus target price of $72.00, indicating a potential upside of ∞. Given DST Systems’ stronger consensus rating and higher probable upside, analysts clearly believe DST Systems is more favorable than Inovalon.

Dividends

DST Systems pays an annual dividend of $0.72 per share. Inovalon does not pay a dividend. DST Systems has increased its dividend for 2 consecutive years.

Valuation and Earnings

This table compares Inovalon and DST Systems’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Inovalon $449.36 million 4.46 $34.81 million $0.23 57.17
DST Systems N/A N/A N/A N/A N/A

Inovalon has higher revenue and earnings than DST Systems.

Profitability

This table compares Inovalon and DST Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Inovalon -2.12% 4.12% 1.90%
DST Systems N/A N/A N/A

Summary

DST Systems beats Inovalon on 5 of the 9 factors compared between the two stocks.

Inovalon Company Profile

Inovalon Holdings, Inc., a technology company, provides cloud-based platforms empowering a data-driven transformation from volume-based to value-based models in the healthcare industry. The company's platform enables the assessment and enhancement of clinical and quality outcomes and financial performance. It serves health plans and provider organizations, as well as pharmaceutical, medical device, and diagnostics companies. The company provides technology that supports approximately 500 healthcare organizations. Its platforms are informed by data pertaining to approximately 932,000 physicians; 455,000 clinical facilities; and approximately 240 million individuals and 37 billion medical events. Inovalon Holdings, Inc. was founded in 1998 and is headquartered in Bowie, Maryland.

DST Systems Company Profile

DST Systems, Inc. provides technology-based information processing and servicing solutions in the United States, the United Kingdom, Canada, Australia, and internationally. It operates through Domestic Financial Services, International Financial Services, and Healthcare Services segments. The Domestic Financial Services segment provides investor, investment, advisor/intermediary, and asset distribution services to companies in the financial services industry to support direct and intermediary sales of mutual funds, alternative investments, securities brokerage accounts, and retirement plans. Its services include transaction processing; account opening and maintenance; reconciliation of trades, positions, and cash; corporate actions; regulatory reporting and compliance functions; and tax reporting. The International Financial Services segment offers investor and policyholder administration and technology services on a remote processing and business process outsourcing basis to mutual fund managers, insurers, and platform providers, as well as provides solutions related to participant accounting and recordkeeping for clients in the wealth management and retirement savings industries/markets. Its Healthcare Services segment offers software applications to provide healthcare organizations with pharmacy, healthcare administration, and health outcomes optimization solutions for information processing, quality of care, cost management, and payment integrity needs; and healthcare solutions, including claims adjudication, benefit management, care management, business intelligence, and other ancillary services. The company was founded in 1968 and is headquartered in Kansas City, Missouri.

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