Contrasting ServiceNow (NYSE:NOW) and LogMeIn (NYSE:LOGM)

ServiceNow (NYSE:NOW) and LogMeIn (NASDAQ:LOGM) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, earnings, dividends, institutional ownership, valuation, profitability and analyst recommendations.

Dividends

LogMeIn pays an annual dividend of $1.30 per share and has a dividend yield of 1.9%. ServiceNow does not pay a dividend. LogMeIn pays out 28.6% of its earnings in the form of a dividend.

Profitability

This table compares ServiceNow and LogMeIn’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ServiceNow 0.09% 4.29% 1.20%
LogMeIn 1.82% 7.44% 5.49%

Analyst Recommendations

This is a breakdown of current ratings and target prices for ServiceNow and LogMeIn, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ServiceNow 0 4 24 2 2.93
LogMeIn 1 5 4 0 2.30

ServiceNow currently has a consensus price target of $287.46, indicating a potential upside of 11.89%. LogMeIn has a consensus price target of $95.25, indicating a potential upside of 39.77%. Given LogMeIn’s higher probable upside, analysts plainly believe LogMeIn is more favorable than ServiceNow.

Institutional and Insider Ownership

93.7% of ServiceNow shares are owned by institutional investors. Comparatively, 98.1% of LogMeIn shares are owned by institutional investors. 1.0% of ServiceNow shares are owned by insiders. Comparatively, 2.4% of LogMeIn shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares ServiceNow and LogMeIn’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ServiceNow $2.61 billion 18.46 -$26.70 million $0.20 1,284.55
LogMeIn $1.20 billion 2.82 $74.37 million $4.55 14.98

LogMeIn has lower revenue, but higher earnings than ServiceNow. LogMeIn is trading at a lower price-to-earnings ratio than ServiceNow, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

ServiceNow has a beta of 1.3, suggesting that its stock price is 30% more volatile than the S&P 500. Comparatively, LogMeIn has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500.

Summary

LogMeIn beats ServiceNow on 9 of the 17 factors compared between the two stocks.

ServiceNow Company Profile

ServiceNow, Inc. provides enterprise cloud computing solutions that define, structure, manage, and automate services for enterprises worldwide. The company offers information technology (IT) service management applications, as well as digital workflow products for customer service, human resources, security operations, integrated risk management, and other enterprise departments. It operates the Now platform that offers workflow automation, electronic service catalogs and portals, configuration management systems, data benchmarking, performance analytics, encryption, and collaboration and development tools. The company also provides IT service management product suite for enterprise's employees, customers, and partners; IT operations management product that connects a customer's physical and cloud-based IT infrastructure with applications and platforms; IT Asset Management product to automate IT asset lifecycles with workflows; IT business management product suite to manage IT priorities; and enterprise development operations product for developers' toolchain. In addition, it offers customer service management product for customer service cases and requests; human resources service delivery product; security operations product for security operations management requirements of third-party; governance, risk, and compliance product to create policies and controls; and field service management application. Further, the company provides professional services, training services and certification programs, and customer support services. It serves enterprises in industries, such as financial services, consumer products, IT services, healthcare, government, education, and technology. The company sells its products through its direct sales team, as well as through resale partners. The company was formerly known as Service-now.com and changed its name to ServiceNow, Inc. in May 2012. ServiceNow, Inc. was founded in 2004 and is headquartered in Santa Clara, California.

LogMeIn Company Profile

LogMeIn, Inc. provides a portfolio of cloud-based communication and collaboration, identity and access, and customer engagement and support solutions. It enables people to connect with each other worldwide to drive meaningful interactions, deepen relationships, and create better outcomes for individuals and businesses. The company offers GoToConference, a video and audio conferencing solution; GoToMeeting, a product for online meetings, sales demonstrations, and collaborative gatherings; GoToTraining, an online training product for interactive training sessions; GoToWebinar, a do-it-yourself Webinar product for organizations; Grasshopper telephony solution; Jive, a cloud-based phone service; join.me, join.me pro, and join.me business, which are online meeting and screen sharing services; and OpenVoice, a reservation-less audio conferencing service. It also provides Bold360 and BoldChat, an omni-channel engagement platform and live chat service respectively; Bold360 ai, an automated customer service; RescueAssist, GoToAssist Corporate, and GoToAssist Seeit, which are easy-to-use cloud-based remote support solutions; LogMeIn Rescue, a remote support and customer care service; and LogMeIn Rescue+Mobile and Rescue Lens that are Web-based remote support services. In addition, the company offers LogMeIn Central, a Web-based management console; GoToMyPC that enables mobile workstyles; LogMeIn Pro, a remote access service; and LastPass, a password management and single sign on solution. It serves enterprise customers, small and medium businesses, IT service providers, mobile carriers, customer service centers, OEMs, and consumers. The company was formerly known as 3am Labs, Inc. and changed its name to LogMeIn, Inc. in March 2006. LogMeIn, Inc. was founded in 2003 and is headquartered in Boston, Massachusetts with additional locations in North America, South America, Europe, Asia, and Australia.

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