Financial Comparison: Scientific Games (NASDAQ:SGMS) vs. Onespan (NASDAQ:OSPN)

Onespan (NASDAQ:OSPN) and Scientific Games (NASDAQ:SGMS) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, earnings, dividends and risk.

Insider & Institutional Ownership

64.7% of Onespan shares are held by institutional investors. Comparatively, 65.2% of Scientific Games shares are held by institutional investors. 19.3% of Onespan shares are held by insiders. Comparatively, 40.5% of Scientific Games shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Onespan and Scientific Games, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Onespan 0 1 4 0 2.80
Scientific Games 1 3 3 0 2.29

Onespan currently has a consensus price target of $19.33, suggesting a potential upside of 39.89%. Scientific Games has a consensus price target of $29.00, suggesting a potential upside of 58.90%. Given Scientific Games’ higher probable upside, analysts clearly believe Scientific Games is more favorable than Onespan.

Valuation and Earnings

This table compares Onespan and Scientific Games’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Onespan $212.28 million 2.62 $3.85 million $0.36 38.39
Scientific Games $3.36 billion 0.50 -$352.40 million ($0.54) -33.80

Onespan has higher earnings, but lower revenue than Scientific Games. Scientific Games is trading at a lower price-to-earnings ratio than Onespan, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Onespan and Scientific Games’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Onespan -1.69% 3.73% 2.69%
Scientific Games -5.15% -0.60% 0.18%

Volatility and Risk

Onespan has a beta of 2.16, meaning that its stock price is 116% more volatile than the S&P 500. Comparatively, Scientific Games has a beta of 2.42, meaning that its stock price is 142% more volatile than the S&P 500.

Summary

Onespan beats Scientific Games on 9 of the 14 factors compared between the two stocks.

Onespan Company Profile

OneSpan, Inc. engages in the design, development, and marketing of security solutions for identity, security, and business productivity that protect and facilitate transactions online, via mobile devices, and in-person. Its solutions has the following functions: secure access to online accounts, data, assets, and applications for global enterprises; provide tools for application developers to easily integrate security functions into their web-based and mobile applications; and facilitate digital transactions involving the signing, sending, and managing of documents. The company was founded by T. Kendall Hunt in 1991 and is headquartered in Chicago, IL.

Scientific Games Company Profile

Scientific Games Corporation develops technology-based products and services, and related content for the gaming, lottery, and digital gaming industries worldwide. The company's Gaming segment sells new and used gaming machines, electronic table systems, video lottery terminals, conversion game kits, and spare parts; slot, casino, and table-management systems; table products, including shufflers; and perpetual licenses to proprietary table games. It also leases gaming machines; provides gaming operations and licensing arrangements; and installs and supports casino management systems, such as ongoing hardware and software maintenance and upgrade services of customer casino management systems. The company's Lottery segment designs, prints, and sells instant lottery products; designs and manufactures instant games tickets; offers instant products planning, monitoring, management system, warehousing, inventory management, distribution, marketing, and game support functions; supplies player loyalty programs, merchandising services, and interactive marketing campaigns; and sublicenses brands for lottery products and lottery-related promotional products. It also provides software, hardware, and related services for lottery operations; and lottery systems software maintenance and support services. The company's Social segment sells virtual coins, chips, or bingo cards; and third-party branded games and original content through mobile and Web platforms. Its Digital segment provides digital gaming and sports wagering solutions and services, including digital RMG and sports wagering solutions, distribution platforms, content, products, and services; software design, development, licensing, maintenance, and support services; Open Platform Systems; and content aggregation platforms. The company was founded in 1984 and is headquartered in Las Vegas, Nevada.

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