Science Applications International (NASDAQ:SAIC) versus Broadridge Financial Solutions (NYSE:BR) Critical Analysis

Broadridge Financial Solutions (NYSE:BR) and Science Applications International (NASDAQ:SAIC) are both industrials companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, risk, profitability, institutional ownership and earnings.

Analyst Ratings

This is a summary of current ratings for Broadridge Financial Solutions and Science Applications International, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Broadridge Financial Solutions	0	4	4	0	2.50
Science Applications International	1	8	2	0	2.09

Broadridge Financial Solutions presently has a consensus price target of $216.00, suggesting a potential upside of 31.76%. Science Applications International has a consensus price target of $125.22, suggesting a potential downside of 5.57%. Given Broadridge Financial Solutions’ stronger consensus rating and higher possible upside, research analysts clearly believe Broadridge Financial Solutions is more favorable than Science Applications International.

Volatility & Risk

Broadridge Financial Solutions has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500. Comparatively, Science Applications International has a beta of 0.3, indicating that its stock price is 70% less volatile than the S&P 500.

Profitability

This table compares Broadridge Financial Solutions and Science Applications International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Broadridge Financial Solutions	15.04%	40.25%	12.97%
Science Applications International	5.13%	34.68%	9.45%

Dividends

Broadridge Financial Solutions pays an annual dividend of $4.36 per share and has a dividend yield of 2.7%. Science Applications International pays an annual dividend of $1.48 per share and has a dividend yield of 1.1%. Broadridge Financial Solutions pays out 45.3% of its earnings in the form of a dividend. Science Applications International pays out 17.3% 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. Broadridge Financial Solutions has raised its dividend for 18 consecutive years. Broadridge Financial Solutions is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Broadridge Financial Solutions and Science Applications International”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Broadridge Financial Solutions	$7.48 billion	2.50	$1.12 billion	$9.62	17.04
Science Applications International	$7.40 billion	0.75	$358.00 million	$8.55	15.51

Broadridge Financial Solutions has higher revenue and earnings than Science Applications International. Science Applications International is trading at a lower price-to-earnings ratio than Broadridge Financial Solutions, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

90.0% of Broadridge Financial Solutions shares are owned by institutional investors. Comparatively, 76.0% of Science Applications International shares are owned by institutional investors. 1.1% of Broadridge Financial Solutions shares are owned by company insiders. Comparatively, 0.7% of Science Applications International shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Broadridge Financial Solutions beats Science Applications International on 16 of the 17 factors compared between the two stocks.

About Broadridge Financial Solutions

Broadridge Financial Solutions, Inc. provides investor communications and technology-driven solutions for the financial services industry. The company's Investor Communication Solutions segment processes and distributes proxy materials to investors in equity securities and mutual funds, as well as facilitates related vote processing services; and distributes regulatory reports, class action, and corporate action/reorganization event information, as well as tax reporting solutions. It also offers ProxyEdge, an electronic proxy delivery and voting solution; data-driven solutions and an end-to-end platform for content management, composition, and omni-channel distribution of regulatory, marketing, and transactional information, as well as mutual fund trade processing services; solutions for public corporations and mutual funds; data and analytics solutions; SEC filing and capital markets transaction services; registrar, stock transfer, and record-keeping services; and omni-channel customer communications solutions, as well as operates Broadridge Communications Cloud platform that creates, delivers, and manages communications and customer engagement activities. Its Global Technology and Operations segment provides solutions that automate the front-to-back transaction lifecycle of equity, mutual fund, fixed income, foreign exchange and exchange-traded derivatives, order capture and execution, trade confirmation, margin, cash management, clearing and settlement, reference data management, reconciliations, securities financing and collateral management, asset servicing, compliance and regulatory reporting, portfolio accounting, and custody-related services. This segment also offers business process outsourcing services; technology solutions, such portfolio management, compliance, fee billing, and operational support solutions; and capital market and wealth and investment management solutions. The company was founded in 1962 and is headquartered in Lake Success, New York.

About Science Applications International

Science Applications International Corporation provides technical, engineering, and enterprise information technology (IT) services primarily in the United States. The company’s offerings include engineering; technology integration; IT modernization; maintenance of ground and maritime systems; logistics; training and simulation; operation and program support services; and end-to-end services, such as design, development, integration, deployment, management and operations, sustainment, and security of its customers’ IT infrastructure, as well as cloud migration, managed services, infrastructure modernization, and enterprise IT-as-a-service solutions. It serves the U.S. military comprising Army, Air Force, Navy, Marines, and Coast Guard; Department of Defense agencies; National Aeronautics and Space Administration; the U.S. Department of State; Department of Justice; Department of Homeland Security; and various intelligence community agencies, as well as U.S. federal civilian agencies. The company was formerly known as SAIC Gemini, Inc. and changed its name to Science Applications International Corporation in September 2013. Science Applications International Corporation was founded in 1969 and is headquartered in Reston, Virginia.