Financial Review: Jack Henry & Associates (JKHY) and Xura (MESG)

Jack Henry & Associates (NASDAQ: JKHY) and Xura (NASDAQ:MESG) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Jack Henry & Associates and Xura, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Jack Henry & Associates 0 2 1 0 2.33
Xura 0 0 0 0 N/A

Jack Henry & Associates currently has a consensus price target of $104.33, suggesting a potential downside of 0.07%. Given Jack Henry & Associates’ higher probable upside, analysts clearly believe Jack Henry & Associates is more favorable than Xura.

Earnings and Valuation

This table compares Jack Henry & Associates and Xura’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Jack Henry & Associates $1.43 billion 5.65 $446.61 million $3.14 33.25
Xura N/A N/A N/A $6.67 3.74

Jack Henry & Associates has higher revenue and earnings than Xura. Xura is trading at a lower price-to-earnings ratio than Jack Henry & Associates, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Jack Henry & Associates has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500. Comparatively, Xura has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.

Insider and Institutional Ownership

91.7% of Jack Henry & Associates shares are owned by institutional investors. 0.8% of Jack Henry & Associates shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Jack Henry & Associates and Xura’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Jack Henry & Associates 17.17% 24.65% 13.95%
Xura -37.80% -54.10% -12.53%

Dividends

Jack Henry & Associates pays an annual dividend of $1.24 per share and has a dividend yield of 1.2%. Xura does not pay a dividend. Jack Henry & Associates pays out 39.5% of its earnings in the form of a dividend. Jack Henry & Associates has increased its dividend for 13 consecutive years.

Summary

Jack Henry & Associates beats Xura on 10 of the 13 factors compared between the two stocks.

About Jack Henry & Associates

Jack Henry & Associates, Inc. is a provider of information processing solutions for community banks. The Company offers a range of products and services, including processing transactions, automating business processes, and managing information financial institutions and diverse corporate entities. It operates in two segments: bank systems and services (Bank) and credit union systems and services (Credit Union). It provides its products and services through approximately three business brands, which include Jack Henry Banking, Symitar and ProfitStars. The Core software system consists of the integrated applications required to process deposit, loan, and general ledger transactions, and to maintain centralized customer/member information. Jack Henry Banking markets over three software systems to banks and Symitar markets over two software systems to credit unions. Its subsidiaries include Jack Henry Services, Inc., Symitar Systems, Inc. and Bayside Business Solutions, Inc.

About Xura

Xura, Inc. (Xura) is a United States-based provider of digital communications services. The Company offers a portfolio of digital services solutions that enable global communications across a range of mobile devices and platforms. Its digital communications services include Xura Network Function Virtualization (NFV), Xura Rich Communications Suite (RCS), Xura Signaling Fraud Management, Xura Telco-Web Gateways, Xura Communications Suite and Xura Message Controller. Its monetization services include low credit services and value added services. The Company helps communication service providers (CSPs) and enterprises to navigate and monetize the digital ecosystem through its cloud-based offerings. It also offers Rich Web and Mobile Application Development Framework. The Company helps operators around the world to secure their networks and protect their customers. The Company offers its solutions to people through service providers and enterprises in approximately 140 countries.

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