American Software (NASDAQ:AMSWA – Get Free Report) and The Sage Group (OTCMKTS:SGGEF – Get Free Report) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, earnings, profitability and analyst recommendations.
Institutional and Insider Ownership
79.9% of American Software shares are owned by institutional investors. Comparatively, 54.7% of The Sage Group shares are owned by institutional investors. 11.4% of American Software shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares American Software and The Sage Group’s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| American Software | $123.66 million | 3.18 | $10.42 million | $0.32 | 35.97 |
| The Sage Group | N/A | N/A | N/A | $0.17 | 76.47 |
Profitability
This table compares American Software and The Sage Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| American Software | 9.08% | 8.62% | 6.22% |
| The Sage Group | N/A | N/A | N/A |
Dividends
American Software pays an annual dividend of $0.44 per share and has a dividend yield of 3.8%. The Sage Group pays an annual dividend of $0.12 per share and has a dividend yield of 0.9%. American Software pays out 137.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. The Sage Group pays out 67.8% of its earnings in the form of a dividend.
Analyst Recommendations
This is a summary of recent recommendations for American Software and The Sage Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| American Software | 0 | 0 | 0 | 0 | N/A |
| The Sage Group | 0 | 0 | 0 | 0 | N/A |
American Software presently has a consensus price target of $20.75, indicating a potential upside of 80.28%. Given American Software’s higher possible upside, equities analysts clearly believe American Software is more favorable than The Sage Group.
Summary
American Software beats The Sage Group on 9 of the 11 factors compared between the two stocks.
About American Software
American Software, Inc. develops, markets, and supports a range of computer business application software products in the United States and internationally. It operates through Supply Chain Management (SCM), Information Technology Consulting (IT Consulting), and Other segments. The SCM segment leverages a single platform spanning eight supply chain process areas including product, demand, inventory, network optimization supply, deploy aligned with integrated business planning and supply chain data management. The IT Consulting segment offers IT staffing and consulting services firm. Other segment provides purchasing and materials management, client order processing, financial, e-commerce, and traditional manufacturing software and services. In addition, it offers ongoing support and maintenance services; cloud hosting and managed services; and implementation and training services. The company markets its products through direct and indirect sales channels to the apparel and other soft goods, food and beverage, consumer packaged goods, consumer durable goods, wholesale distribution, specialty chemicals, and other process manufacturing industries. American Software, Inc. was incorporated in 1970 and is headquartered in Atlanta, Georgia.
About The Sage Group
The Sage Group plc, together with its subsidiaries, provides technology solutions and services for small and medium businesses in North America, Northern Europe, and internationally. It offers cloud native solutions, such as Sage Intacct, a cloud accounting software products and financial management software; Sage People, a HR and people management solution; Sage 200, a finance and business management solution; Sage X3, a business management solution; Sage Accounting, a solution for small businesses, accountants, and bookkeepers to manage customer data, accounts, and people; Sage Payroll for small businesses manage their payroll; and Sage HR for small and mid-sized businesses for record management, leave management, staff scheduling, and expenses services. The company also provides Sage 50cloud and Sage 200cloud that provides a range of cloud connected accounting solutions. The company was founded in 1981 and is based in Newcastle upon Tyne, the United Kingdom.
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