Head-To-Head Comparison: Open Text Corporation (OTEX) and Envestnet (ENV)

Envestnet (NYSE: ENV) and Open Text Corporation (NASDAQ:OTEX) are both business services companies, but which is the superior investment? We will compare the two companies based on the strength of their profitabiliy, earnings, valuation, analyst recommendations, risk, institutional ownership and dividends.

Analyst Ratings

This is a summary of recent ratings and price targets for Envestnet and Open Text Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Envestnet 0 2 2 0 2.50
Open Text Corporation 0 2 8 0 2.80

Envestnet currently has a consensus target price of $44.33, indicating a potential upside of 13.68%. Open Text Corporation has a consensus target price of $42.89, indicating a potential upside of 33.78%. Given Open Text Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Open Text Corporation is more favorable than Envestnet.

Institutional and Insider Ownership

98.6% of Envestnet shares are held by institutional investors. Comparatively, 69.1% of Open Text Corporation shares are held by institutional investors. 7.8% of Envestnet shares are held by company insiders. Comparatively, 10.6% of Open Text Corporation shares are held 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.

Profitability

This table compares Envestnet and Open Text Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Envestnet -9.55% 5.86% 2.86%
Open Text Corporation 50.49% 12.06% 5.60%

Volatility & Risk

Envestnet has a beta of 1.76, indicating that its share price is 76% more volatile than the S&P 500. Comparatively, Open Text Corporation has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500.

Valuation and Earnings

This table compares Envestnet and Open Text Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Envestnet $604.13 million 2.83 $51.18 million ($1.33) -29.32
Open Text Corporation $2.11 billion 3.99 $594.15 million $4.34 7.38

Open Text Corporation has higher revenue and earnings than Envestnet. Envestnet is trading at a lower price-to-earnings ratio than Open Text Corporation, indicating that it is currently the more affordable of the two stocks.

Dividends

Open Text Corporation pays an annual dividend of $0.53 per share and has a dividend yield of 1.7%. Envestnet does not pay a dividend. Open Text Corporation pays out 12.2% of its earnings in the form of a dividend.

Summary

Open Text Corporation beats Envestnet on 12 of the 16 factors compared between the two stocks.

Envestnet Company Profile

Envestnet, Inc. is a provider of financial and wealth management technology and services to financial advisors, investors and financial service providers. The Company’s segments are Envestnet and Envestnet Yodlee. Its Envestnet segment provides unified wealth management software and services empowering financial advisors and institutions. Its Envestnet Yodlee segment is a data aggregation and data analytics platform. Its services and related technology are provided through Envestnet’s wealth management software, Envestnet PMC, Envestnet Tamarac, Vantage Reporting Solution, Envestnet WMS, Envestnet Placemark, Envestnet Retirement Solutions, Envestnet Yodlee and Envestnet Finance Logix. It operates Registered Investment Advisors (RIAs) and a registered broker-dealer. Its centrally-hosted technology platform services include risk assessment and selection of investment strategies and solutions, asset allocation models, and research and due diligence.

Open Text Corporation Company Profile

Open Text Corporation provides a platform and suite of software products and services that assist organizations in finding, utilizing, and sharing business information from any device. The Company designs, develops, markets and sells Enterprise Information Management (EIM) software and solutions. Its EIM offerings include Enterprise Content Management (ECM), Business Process Management (BPM), Customer Experience Management (CEM), Business Network, Discovery and Analytics. Its software and services allow organizations to manage the information that flows into, out of, and throughout the enterprise as part of daily operations. Its solutions incorporate collaborative and mobile technologies and are delivered for on-premises deployment, as well as through cloud, hybrid and managed hosted services models. In addition, the Company provides solutions that facilitate the exchange of information and transactions that occur between supply chain participants.

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