Critical Analysis: Experian (OTCMKTS:EXPGY) vs. Verisk Analytics (NASDAQ:VRSK)

Verisk Analytics (NASDAQ:VRSK) and Experian (OTCMKTS:EXPGY) are both large-cap business services companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, profitability, dividends, earnings, institutional ownership and risk.

Dividends

Verisk Analytics pays an annual dividend of $1.80 per share and has a dividend yield of 0.8%. Experian pays an annual dividend of $0.81 per share and has a dividend yield of 1.8%. Verisk Analytics pays out 27.4% of its earnings in the form of a dividend. Verisk Analytics has increased its dividend for 6 consecutive years.

Profitability

This table compares Verisk Analytics and Experian’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Verisk Analytics	30.42%	425.42%	19.14%
Experian	N/A	N/A	N/A

Valuation & Earnings

This table compares Verisk Analytics and Experian”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Verisk Analytics	$3.03 billion	9.88	$958.20 million	$6.56	32.72
Experian	$7.52 billion	5.51	$1.17 billion	N/A	N/A

Experian has higher revenue and earnings than Verisk Analytics.

Risk and Volatility

Verisk Analytics has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500. Comparatively, Experian has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Verisk Analytics and Experian, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Verisk Analytics	3	6	7	1	2.35
Experian	0	1	0	0	2.00

Verisk Analytics presently has a consensus target price of $282.14, indicating a potential upside of 31.44%. Given Verisk Analytics’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Verisk Analytics is more favorable than Experian.

Institutional & Insider Ownership

90.0% of Verisk Analytics shares are owned by institutional investors. Comparatively, 0.3% of Experian shares are owned by institutional investors. 0.5% of Verisk Analytics shares are owned by insiders. Comparatively, 0.1% of Experian shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Verisk Analytics beats Experian on 11 of the 16 factors compared between the two stocks.

About Verisk Analytics

Verisk Analytics, Inc. provides data analytics and technology solutions to the insurance markets in the United States and internationally. It offers policy language, prospective loss costs, policy writing and rating rules, and various underwriting solutions for risk selection and segmentation, pricing, and workflow optimization; property- and auto- specific rating and underwriting information solutions that allows clients to understand, quantify, underwrite, mitigate, and avoid potential loss for risks; catastrophe modeling solutions, which enables companies to identify, quantify, and plan for the financial consequences of catastrophes for use by insurers, reinsurers, intermediaries, financial institutions, and governments. The company also provides life insurance solutions for transforming current workflows in life insurance underwriting, claim insights, policy administration, unclaimed property/equity, compliance and fraud detection, and actuarial and portfolio modeling; Marketing Solutions, such as compliant, real-time decisioning, profitability, and risk assessment for inbound consumer interactions; and international underwriting and claims solutions. In addition, it offers claims insurance solutions, which provides analytics in fraud detection, compliance reporting, subrogation liability assessment, litigation, and repair cost estimation and valuation solutions; and casualty solutions, such as compliance, casualty claims decision support, and workflow automation solutions. Further, the company supplies software to the specialty insurance market. The company was founded in 1971 and is headquartered in Jersey City, New Jersey.

About Experian

Experian plc, together with its subsidiaries, operates as a technology company in North America, Latin America, the United Kingdom, Ireland, Europe, the Middle East, Africa, and the Asia Pacific. It operates in two segments, Business-to-Business and Consumer Services. The company collects, sorts, aggregates, and transforms data from various sources to provide a range of data-driven services. It also owns, create, and develops analytics, predictive tools, sophisticated software, and platforms; credit risk, fraud prevention, identity management, customer service and engagement, account processing, and account management services; data analysis, and research and development services. In addition, the company provides credit education, free access to Experian credit reports and scores, and online educational tools. It serves its customers in financial service, direct-to-consumer, health, retail, automotive, software and professional services, telecoms and utility, insurance, media and technology, and other industries, as well as government and public sectors. The company was formerly known as Experian Group Limited and changed its name to Experian plc in July 2008. Experian plc was founded in 1826 and is headquartered in Dublin, Ireland.