Open Text (NASDAQ:OTEX) versus Pareteum (NASDAQ:TEUM) Financial Contrast

Open Text (NASDAQ:OTEX) and Pareteum (NASDAQ:TEUM) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for Open Text and Pareteum, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Open Text 0 0 7 0 3.00
Pareteum 0 0 4 0 3.00

Open Text currently has a consensus target price of $47.14, indicating a potential upside of 22.67%. Pareteum has a consensus target price of $7.00, indicating a potential upside of 136.49%. Given Pareteum’s higher probable upside, analysts clearly believe Pareteum is more favorable than Open Text.

Profitability

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

Net Margins Return on Equity Return on Assets
Open Text 9.95% 7.50% 3.67%
Pareteum -23.68% -1.90% -1.42%

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Open Text $2.87 billion 3.62 $285.50 million $1.06 36.25
Pareteum $32.44 million 10.19 -$12.98 million $0.09 32.89

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

Volatility & Risk

Open Text has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500. Comparatively, Pareteum has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500.

Dividends

Open Text pays an annual dividend of $0.70 per share and has a dividend yield of 1.8%. Pareteum does not pay a dividend. Open Text pays out 66.0% of its earnings in the form of a dividend. Open Text has increased its dividend for 4 consecutive years.

Institutional & Insider Ownership

67.3% of Open Text shares are owned by institutional investors. Comparatively, 21.9% of Pareteum shares are owned by institutional investors. 10.6% of Open Text shares are owned by insiders. Comparatively, 4.0% of Pareteum shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

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

Open Text Company Profile

Open Text Corporation provides a suite of software products and services. The company offers content services; digital process automation, which enables organizations to transform into digital and data-driven businesses through automation; and discovery suite that provides forensics and unstructured data analytics for searching, collecting, and investigating enterprise data to manage legal obligations and risk. It also provides business network solutions comprising business-to-business integration services, such as secure mail, large file transfer, fax, and electronic data interchange within a single platform; analytics solutions; and forensic security and automated cyber risk management software service. In addition, the company provides customer support programs that include access to software upgrades, a knowledge base, discussions, product information, and an online mechanism to post and review trouble tickets. Further, it offers professional services, such as consulting and learning services relating for the implementation, training, and integration of its licensed product offerings into the customers' systems; and cloud services that allow its customers to make use of its OpenText software, services, and content over Internet enabled networks. The company serves organizations, mid-market companies, and government agencies worldwide. It has strategic partnerships with SAP SE, Microsoft Corporation, Oracle Corporation, Salesforce.com Corporation, Accenture plc, Deloitte Consulting LLP, and others. Open Text Corporation was founded in 1991 and is headquartered in Waterloo, Canada.

Pareteum Company Profile

Pareteum Corporation operates a communications cloud services platform in Europe and internationally. Its platform provides mobility, messaging, and security services and applications, with a single-sign-on, application program interface (API), and software development suite. The company's platform hosts integrated IT/back office and core network functionality for mobile network operators, as well as for enterprises to implement and leverage mobile communications solutions on a Software as a Service (Saas), PaaS, or IaaS basis. It also offers operational support system for channel partners with APIs for integration with third party systems, workflows for complex application orchestration, and customer support with branded portals and plug-ins for various other applications. In addition, the company provides software solutions, which layer over disparate fixed, mobile, and IP networks to enable the deployment of converged communication services and applications for enterprise communications and core telecommunications markets; and Wi-Fi access on mobile devices through its SaaS platform. Pareteum Corporation serves the markets of Internet of Things, mobile virtual network operators, smart cities, and application developers. The company was formerly known as Elephant Talk Communications Corp. and changed its name to Pareteum Corporation in November 2016. Pareteum Corporation is based in New York, New York.

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