Contrasting Onespan (NASDAQ:OSPN) & Open Text (NASDAQ:OTEX)

Onespan (NASDAQ:OSPN) and Open Text (NASDAQ:OTEX) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, profitability, institutional ownership, analyst recommendations, valuation and risk.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Onespan and Open Text, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Onespan 0 1 3 0 2.75
Open Text 0 1 6 0 2.86

Onespan presently has a consensus target price of $18.00, indicating a potential upside of 31.77%. Open Text has a consensus target price of $45.67, indicating a potential upside of 10.71%. Given Onespan’s higher possible upside, analysts clearly believe Onespan is more favorable than Open Text.

Valuation and Earnings

This table compares Onespan 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
Onespan $212.28 million 2.59 $3.85 million $0.36 37.94
Open Text $2.82 billion 3.95 $242.22 million $0.91 45.33

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

Insider & Institutional Ownership

64.7% of Onespan shares are owned by institutional investors. Comparatively, 67.5% of Open Text shares are owned by institutional investors. 19.3% of Onespan shares are owned by insiders. Comparatively, 10.6% of Open Text shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Open Text pays an annual dividend of $0.70 per share and has a dividend yield of 1.7%. Onespan does not pay a dividend. Open Text pays out 76.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Open Text has raised its dividend for 4 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
Onespan -1.69% 3.73% 2.69%
Open Text 9.57% 7.31% 3.55%

Risk & Volatility

Onespan has a beta of 2.16, suggesting that its share price is 116% more volatile than the S&P 500. Comparatively, Open Text has a beta of 0.48, suggesting that its share price is 52% less volatile than the S&P 500.

Summary

Open Text beats Onespan on 13 of the 17 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.

Open Text Company Profile

Open Text Corporation provides a suite of software products and services. The company offers content services; digital process automation, which enables organizations to transform into digital and data-driven businesses through automation; and discovery suite that provides forensics and unstructured data analytics for searching, collecting, and investigating enterprise data to manage legal obligations and risk. It also provides business network solutions comprising business-to-business integration services, such as secure mail, large file transfer, fax, and electronic data interchange within a single platform; analytics solutions; and forensic security and automated cyber risk management software service. In addition, the company provides customer support programs that include access to software upgrades, a knowledge base, discussions, product information, and an online mechanism to post and review trouble tickets. Further, it offers professional services, such as consulting and learning services relating for the implementation, training, and integration of its licensed product offerings into the customers' systems; and cloud services that allow its customers to make use of its OpenText software, services, and content over Internet enabled networks. The company serves organizations, mid-market companies, and government agencies worldwide. It has strategic partnerships with SAP SE, Microsoft Corporation, Oracle Corporation, Salesforce.com Corporation, Accenture plc, Deloitte Consulting LLP, and others. Open Text Corporation was founded in 1991 and is headquartered in Waterloo, Canada.

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