Franklin Covey (NYSE:FC – Get Rating) and Veritec (OTCMKTS:VRTC – Get Rating) are both small-cap business services companies, but which is the better stock? We will compare the two companies based on the strength of their risk, institutional ownership, analyst recommendations, earnings, dividends, valuation and profitability.
Risk and Volatility
Franklin Covey has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500. Comparatively, Veritec has a beta of -22.63, suggesting that its share price is 2,363% less volatile than the S&P 500.
Insider & Institutional Ownership
68.1% of Franklin Covey shares are owned by institutional investors. 12.9% of Franklin Covey shares are owned by company insiders. Comparatively, 51.8% of Veritec shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Franklin Covey | 0 | 0 | 3 | 0 | 3.00 |
| Veritec | 0 | 0 | 0 | 0 | N/A |
Franklin Covey currently has a consensus price target of $72.00, suggesting a potential upside of 90.98%. Given Franklin Covey’s higher probable upside, equities research analysts clearly believe Franklin Covey is more favorable than Veritec.
Profitability
This table compares Franklin Covey and Veritec’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Franklin Covey | 6.93% | 18.48% | 6.53% |
| Veritec | -201.65% | N/A | -460.19% |
Earnings & Valuation
This table compares Franklin Covey and Veritec’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Franklin Covey | $262.84 million | 1.99 | $18.43 million | $1.34 | 28.13 |
| Veritec | $350,000.00 | N/A | -$510,000.00 | ($0.03) | -0.60 |
Franklin Covey has higher revenue and earnings than Veritec. Veritec is trading at a lower price-to-earnings ratio than Franklin Covey, indicating that it is currently the more affordable of the two stocks.
Summary
Franklin Covey beats Veritec on 11 of the 12 factors compared between the two stocks.
About Franklin Covey
Franklin Covey Co. engages in organizational performance improvement. It operates through the following segments: Direct Offices, International Licensees, Education Practice, and Corporate and Other. The Direct Offices segment includes sales personnel that serve the United States and Canada. The International Licensees segment focuses on international licensees’ royalty revenues. The Education Practice is involved in domestic and international education practice operations. The Corporate and Other segment refers to corporate and other information including royalty revenue from Franklin Planner Corporation. The company was founded by Brent L. Bishop, Stephen R. Covey, and Hyrum Wayne Smith in 1983 and is headquartered in Salt Lake City, UT.
About Veritec
Veritec, Inc. engages in the development, sales, and licensing of products. It also provides services related to mobile banking solutions. The firm also operates in back-end cardholder transaction processing services for visa-branded card programs on behalf of its sponsoring bank. The company was founded on September 8, 1982 and is headquartered in Golden Valley, MN.
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