Contrasting Alight (NYSE:ALIT) & Thomson Reuters (NASDAQ:TRI)

Alight (NYSE:ALIT) and Thomson Reuters (NASDAQ:TRI) are both industrials 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.

Profitability

This table compares Alight and Thomson Reuters’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alight	-90.90%	16.05%	4.38%
Thomson Reuters	21.22%	15.82%	10.27%

Earnings and Valuation

This table compares Alight and Thomson Reuters”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alight	$2.23 billion	0.14	-$3.10 billion	($77.18)	-0.15
Thomson Reuters	$7.48 billion	5.53	$1.50 billion	$3.76	25.38

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

Insider and Institutional Ownership

96.7% of Alight shares are owned by institutional investors. Comparatively, 17.3% of Thomson Reuters shares are owned by institutional investors. 2.1% of Alight 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.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Alight and Thomson Reuters, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alight	2	3	3	0	2.12
Thomson Reuters	0	6	10	1	2.71

Alight currently has a consensus price target of $52.33, suggesting a potential upside of 338.67%. Thomson Reuters has a consensus price target of $131.57, suggesting a potential upside of 37.87%. Given Alight’s higher probable upside, analysts clearly believe Alight is more favorable than Thomson Reuters.

Dividends

Alight pays an annual dividend of $0.12 per share and has a dividend yield of 1.0%. Thomson Reuters pays an annual dividend of $2.62 per share and has a dividend yield of 2.7%. Alight pays out -0.2% of its earnings in the form of a dividend. Thomson Reuters pays out 69.7% 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.

Volatility and Risk

Alight has a beta of 1.56, meaning that its share price is 56% more volatile than the S&P 500. Comparatively, Thomson Reuters has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500.

Summary

Thomson Reuters beats Alight on 11 of the 17 factors compared between the two stocks.

About Alight

Alight, Inc. provides cloud-based integrated digital human capital and business solutions worldwide. The company operates through two segments, Employer Solutions and Professional Services. The Employer Solutions segment offers employee wellbeing, integrated benefits administration, healthcare navigation, financial wellbeing, leave of absence management, retiree healthcare and payroll; and operates AI-led capabilities software. The Professional Services segment offers consulting offerings, such as cloud advisory, deployment, and optimization services for cloud platforms. The company provides Alight Worklife, an intuitive, cloud-based employee engagement platform. Its solutions enable employees to enrich their health, wealth, and wellbeing that helps organizations achieve a high-performance culture. Alight, Inc. was founded in 2020 and is based in Lincolnshire, Illinois.

About Thomson Reuters

Thomson Reuters Corporation provides business information services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates in five segments: Legal Professionals, Corporates, Tax & Accounting Professionals, Reuters News, and Global Print. The Legal Professionals segment offers research and workflow products focusing on legal research and integrated legal workflow solutions that combine content, tools, and analytics to law firms and governments. The Corporates segment provides a suite of content-enabled technology solutions for legal, tax, regulatory, compliance, and IT professionals. The Tax & Accounting Professionals segment offers research and workflow products focusing on tax offerings and automating tax workflows to tax, accounting, and audit professionals in accounting firms. The Reuters News segment provides business, financial, and international news to media organizations, professional, and news consumers through news agency and industry events. The Global Print segment offers legal and tax information primarily in print format to legal and tax professionals, governments, law schools, and corporations. The company was formerly known as The Thomson Corporation and changed its name to Thomson Reuters Corporation in April 2008. The company was founded in 1851 and is headquartered in Toronto, Canada. Thomson Reuters Corporation is a subsidiary of The Woodbridge Company Limited.