Head-To-Head Review: DST Systems (DST) and YY (YY)

DST Systems (NYSE: DST) and YY (NASDAQ:YY) are both mid-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, profitability, dividends, valuation and risk.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for DST Systems and YY, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DST Systems 0 4 0 0 2.00
YY 0 1 10 0 2.91

DST Systems currently has a consensus target price of $68.33, suggesting a potential downside of 18.64%. YY has a consensus target price of $138.80, suggesting a potential upside of 20.03%. Given YY’s stronger consensus rating and higher possible upside, analysts clearly believe YY is more favorable than DST Systems.

Profitability

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

Net Margins Return on Equity Return on Assets
DST Systems 20.35% 16.90% 6.96%
YY 23.00% 27.41% 21.20%

Risk & Volatility

DST Systems has a beta of 1.51, indicating that its share price is 51% more volatile than the S&P 500. Comparatively, YY has a beta of 1.52, indicating that its share price is 52% more volatile than the S&P 500.

Dividends

DST Systems pays an annual dividend of $0.72 per share and has a dividend yield of 0.9%. YY does not pay a dividend. DST Systems pays out 21.4% of its earnings in the form of a dividend. DST Systems has raised its dividend for 2 consecutive years.

Institutional and Insider Ownership

85.7% of DST Systems shares are owned by institutional investors. Comparatively, 55.4% of YY shares are owned by institutional investors. 1.8% of DST Systems shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
DST Systems $2.22 billion 2.25 $451.50 million $3.36 25.00
YY $1.78 billion 4.10 $383.20 million $6.35 18.21

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

Summary

YY beats DST Systems on 10 of the 17 factors compared between the two stocks.

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.

YY Company Profile

YY Inc., through its subsidiaries, operates a live streaming platform in the People's Republic of China. It engages users to interact in live online group activities through voice, text, and video, as well as to create and organize groups of various sizes to discover and participate in a range of online activities, including music shows, online games, dating shows, live game broadcasting, and e-learning. The company's primary product is YY Client, which enables users to engage in live interactions online; and provides access to user-created online social activities groups. It also offers Web-based YY that enables users to conduct real-time interactions and watch live streaming content on the Web browsers without any downloads or installations; and YY Live, a music and entertainment mobile application. In addition, the company operates Duowan.com, a game media Website that provides access to and interactive resources for online games; and YY.com, Huya.com, and Zhiniu8.com to browse and watch various categories of live broadcasts and other contents on the YY platform, as well as 100.com that provides various online education contents. Further, it is involved in the online advertising and software development activities. YY Inc. was founded in 2005 and is headquartered in Guangzhou, the People's Republic of China.

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