Comparing Sapiens International (NASDAQ:SPNS) and Simulations Plus (NASDAQ:SLP)

Simulations Plus (NASDAQ:SLP) and Sapiens International (NASDAQ:SPNS) are both computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Analyst Ratings

This is a summary of recent recommendations and price targets for Simulations Plus and Sapiens International, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Simulations Plus	1	5	4	1	2.45
Sapiens International	1	2	1	0	2.00

Simulations Plus presently has a consensus price target of $24.40, suggesting a potential upside of 30.48%. Sapiens International has a consensus price target of $31.33, suggesting a potential downside of 27.89%. Given Simulations Plus’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Simulations Plus is more favorable than Sapiens International.

Profitability

This table compares Simulations Plus and Sapiens International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Simulations Plus	-81.74%	13.27%	12.44%
Sapiens International	11.40%	16.08%	10.86%

Institutional and Insider Ownership

78.1% of Simulations Plus shares are held by institutional investors. Comparatively, 30.7% of Sapiens International shares are held by institutional investors. 19.4% of Simulations Plus shares are held by company insiders. Comparatively, 16.0% of Sapiens International shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Simulations Plus pays an annual dividend of $0.24 per share and has a dividend yield of 1.3%. Sapiens International pays an annual dividend of $0.30 per share and has a dividend yield of 0.7%. Simulations Plus pays out -7.5% of its earnings in the form of a dividend. Sapiens International pays out 26.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Sapiens International has increased its dividend for 3 consecutive years. Simulations Plus is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Simulations Plus and Sapiens International”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Simulations Plus	$79.18 million	4.76	-$64.72 million	($3.22)	-5.81
Sapiens International	$564.33 million	4.31	$72.18 million	$1.14	38.11

Sapiens International has higher revenue and earnings than Simulations Plus. Simulations Plus is trading at a lower price-to-earnings ratio than Sapiens International, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Simulations Plus has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500. Comparatively, Sapiens International has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500.

Summary

Simulations Plus beats Sapiens International on 11 of the 18 factors compared between the two stocks.

About Simulations Plus

Simulations Plus, Inc. develops drug discovery and development software for modeling and simulation, and prediction of molecular properties utilizing artificial intelligence and machine learning based technology worldwide. The company operates through two segments, Software and Services. It offers GastroPlus, which simulates the absorption and drug interaction of compounds administered to humans and animals; and DDDPlus and MembranePlus simulation products. The company also provides products based on mechanistic and mathematical models, such as DILIsym, NAFLDsym, ILDsym, RENAsym, IPFsym, and MITOsym products. In addition, it offers Absorption, Distribution, Metabolism, Excretion, and Toxicity Predictor for chemistry-based computer program that takes molecular structures as inputs and predicts their properties; and MedChem Designer, as well as MonolixSuite products for modeling and simulation that allows for population analyses, rapid clinical trial data analyses, and regulatory submissions. Further, the company provides clinical-pharmacology-based consulting services, which includes population pharmacokinetic and pharmacodynamic modeling, exposure-response analyses, clinical trial simulations, data programming, and technical writing services in support of regulatory submissions; and early drug discovery services. Additionally, it offers creative and insightful consulting services to support its quantitative systems pharmacology/quantitative systems toxicology modelling. The company serves pharmaceutical, biotechnology, agrochemical, cosmetics, and food industry companies, as well as academic and regulatory agencies. Simulations Plus, Inc. was incorporated in 1996 and is headquartered in Lancaster, California.

About Sapiens International

Sapiens International Corporation N.V. provides software solutions for the insurance industry in North America, the United Kingdom, Europe, the Middle East, Africa, the Asia Pacific, and internationally. The company provides various solutions for property and casualty commercial and personal lines, life and pensions, and reinsurance fields. It offers IDITSuite, an AI powered, end-to-end insurance software; DigitalSuite, a cloud-native, future-proof digital engagement platform; IDITGo, a pre-configured, data-enriched insurance launch and accelerator platform solutions; consultancy services for property and casualty commercial lines; and Tia Enterprise solution for customer engagement. The company also provides CoreSuite, an end-to-end cloud and digital PAS for individual and group products across life, health, wealth, and pensions; CustomerConnect, a dynamic self-service and persona-based portal to engage with insureds; AgentConnect, a portal for agents and brokers to focus on sales enablement, customer retention, and increasing customer value; and ReinsuranceMaster, a reinsurance automation software that provides insurers full financial control and flexibility over their entire reinsurance process. The company was founded in 1982 and is headquartered in Holon, Israel.