Analyzing ACI Worldwide (NASDAQ:ACIW) and Tyler Technologies (NYSE:TYL)

Tyler Technologies (NYSE:TYL) and ACI Worldwide (NASDAQ:ACIW) are both technology companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, risk, earnings, analyst recommendations and valuation.

Analyst Ratings

This is a breakdown of current ratings for Tyler Technologies and ACI Worldwide, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tyler Technologies	0	4	11	1	2.81
ACI Worldwide	0	2	2	1	2.80

Tyler Technologies currently has a consensus price target of $440.88, indicating a potential upside of 4.14%. ACI Worldwide has a consensus price target of $61.00, indicating a potential downside of 0.42%. Given Tyler Technologies’ stronger consensus rating and higher probable upside, analysts clearly believe Tyler Technologies is more favorable than ACI Worldwide.

Profitability

This table compares Tyler Technologies and ACI Worldwide’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tyler Technologies	13.51%	12.21%	7.30%
ACI Worldwide	9.46%	13.65%	6.60%

Institutional and Insider Ownership

93.3% of Tyler Technologies shares are owned by institutional investors. Comparatively, 94.7% of ACI Worldwide shares are owned by institutional investors. 1.1% of Tyler Technologies shares are owned by insiders. Comparatively, 1.2% of ACI Worldwide shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Tyler Technologies and ACI Worldwide”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tyler Technologies	$2.33 billion	7.22	$315.60 million	$7.94	53.32
ACI Worldwide	$1.76 billion	3.48	$226.66 million	$1.62	37.81

Tyler Technologies has higher revenue and earnings than ACI Worldwide. ACI Worldwide is trading at a lower price-to-earnings ratio than Tyler Technologies, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Tyler Technologies has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, ACI Worldwide has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.

Summary

Tyler Technologies beats ACI Worldwide on 10 of the 14 factors compared between the two stocks.

About Tyler Technologies

Tyler Technologies provides software and technology services primarily to public-sector organizations. Its customers include state and local governments, courts, public safety agencies, schools, and other public entities. The company’s offerings include software for financial management, tax and property appraisal, courts and justice, public safety, education, utility billing, and permitting. Tyler also provides digital services such as online payments and tools for public access to government information.

About ACI Worldwide

ACI Worldwide is a financial technology company that develops software for electronic payments. Its products help banks, credit unions, merchants, billers and government organizations process and manage payments across digital and traditional channels. The company’s offerings include real-time payment solutions, digital banking and bill-payment services, merchant payment processing, and tools for detecting and managing fraud. ACI’s software supports payment activity from initiation through processing and settlement.