Comparing DST Systems (DST) & Internap (INAP)

DST Systems (NYSE: DST) and Internap (NASDAQ:INAP) are both technology companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, profitability, risk, earnings and dividends.

Analyst Ratings

This is a summary of current ratings and price targets for DST Systems and Internap, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DST Systems 0 1 2 0 2.67
Internap 0 0 2 1 3.33

DST Systems currently has a consensus target price of $68.33, suggesting a potential downside of 14.47%. Internap has a consensus target price of $24.67, suggesting a potential upside of 64.12%. Given Internap’s stronger consensus rating and higher possible upside, analysts plainly believe Internap is more favorable than DST Systems.

Risk and Volatility

DST Systems has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500. Comparatively, Internap has a beta of 1.92, indicating that its stock price is 92% more volatile than the S&P 500.

Insider & Institutional Ownership

85.7% of DST Systems shares are owned by institutional investors. 1.8% of DST Systems shares are owned by insiders. Comparatively, 3.7% of Internap shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

DST Systems pays an annual dividend of $0.72 per share and has a dividend yield of 0.9%. Internap does not pay a dividend. DST Systems pays out 10.9% of its earnings in the form of a dividend. DST Systems has raised its dividend for 2 consecutive years.

Profitability

This table compares DST Systems and Internap’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DST Systems 21.26% 16.20% 6.60%
Internap -18.09% -282.42% -5.82%

Earnings & Valuation

This table compares DST Systems and Internap’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
DST Systems $1.56 billion 3.09 $427.30 million $6.62 12.07
Internap $298.30 million 1.05 -$124.74 million ($3.03) -4.96

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

Summary

DST Systems beats Internap on 11 of the 17 factors compared between the two stocks.

About DST Systems

DST Systems, Inc. (DST) is a provider of technology-based information processing and servicing solutions. The Company offers its solutions through data management, business processing and customer communications solutions to clients within the asset management, brokerage, retirement and healthcare markets. The Company operates through two segments: Financial Services and Healthcare Services. Through the Financial Services segment, DST provides investor, investment, advisor/intermediary and asset distribution services to companies within the financial services industry. The Healthcare Services segment uses the Company’s software applications to provide healthcare organizations a range of medical and pharmacy benefit solutions to aid their information processing, quality of care, cost management and payment integrity needs. Its investments in equity securities, private equity investments, real estate and certain financial interests are aggregated into an Investments and Other segment.

About Internap

Internap Corporation is a technology provider of Internet infrastructure. The Company provides Internet infrastructure through both Colocation Business and Enterprise Services and Cloud Services. The Company operates through two segments: Data Center and Network Services, and Cloud and Hosting Services. Its Data Center and Network Services segment consists of colocation and Internet Protocol (IP) connectivity services. Colocation involves providing physical space within data centers and associated services, such as power, interconnection, environmental controls, monitoring and security while allowing its customers to deploy and manage their servers, storage and other equipment in its secure data centers. Its cloud and hosting services segment consists of hosted Infrastructure-as-a-Service as a cloud platform or through managed hosting. For both Infrastructure-as-a-Service options, the Company provides and maintains the hardware, data center infrastructure and interconnection.

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