Critical Comparison: Synopsys (NASDAQ:SNPS) and Intuit (NASDAQ:INTU)

Synopsys (NASDAQ:SNPS) and Intuit (NASDAQ:INTU) are both large-cap computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, dividends, analyst recommendations, valuation, profitability and earnings.

Earnings and Valuation

This table compares Synopsys and Intuit”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Synopsys	$6.13 billion	15.58	$2.26 billion	$13.85	44.41
Intuit	$16.29 billion	13.13	$2.96 billion	$12.32	62.24

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

Institutional and Insider Ownership

85.5% of Synopsys shares are owned by institutional investors. Comparatively, 83.7% of Intuit shares are owned by institutional investors. 0.6% of Synopsys shares are owned by insiders. Comparatively, 2.7% of Intuit shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Synopsys and Intuit, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Synopsys	0	1	13	0	2.93
Intuit	1	2	20	1	2.88

Synopsys currently has a consensus price target of $620.67, indicating a potential upside of 0.90%. Intuit has a consensus price target of $800.55, indicating a potential upside of 4.40%. Given Intuit’s higher probable upside, analysts clearly believe Intuit is more favorable than Synopsys.

Risk & Volatility

Synopsys has a beta of 1.12, indicating that its share price is 12% more volatile than the S&P 500. Comparatively, Intuit has a beta of 1.27, indicating that its share price is 27% more volatile than the S&P 500.

Profitability

This table compares Synopsys and Intuit’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Synopsys	34.77%	17.09%	9.98%
Intuit	19.07%	21.46%	11.99%

Summary

Intuit beats Synopsys on 10 of the 15 factors compared between the two stocks.

About Synopsys

Synopsys, Inc. provides electronic design automation software products used to design and test integrated circuits. It operates in three segments: Design Automation, Design IP, and Software Integrity. The company offers Digital and Custom IC Design solution that provides digital design implementation solutions; Verification solution that offers virtual prototyping, static and formal verification, simulation, emulation, field programmable gate array (FPGA)-based prototyping, and debug solutions; and FPGA design products that are programmed to perform specific functions. It also provides intellectual property (IP) solutions for USB, PCI Express, DDR, Ethernet, MIPI, HDMI, and Bluetooth low energy applications; logic libraries and embedded memories; processor cores, software, and application-specific instruction-set processor tools for embedded applications; security IP solutions; IP solutions for automotive market; and system-on-chip (SoC) infrastructure IP, datapath and building block IP, and verification IP products, as well as mathematical and floating-point components, and Arm AMBA interconnect fabric and peripherals. In addition, the company offers HAPS FPGA-based prototyping systems; virtual prototyping solutions; and Platform Architect solutions for SoC architecture analysis and optimization, as well as optical products, and mechatronic simulations. Further, it provides security and quality testing products, managed services, programs and professional services, and training that enable its customers to detect and remediate security vulnerabilities, and defects in the software development lifecycle, as well as manufacturing solutions. Additionally, the company provides intelligent orchestration solution, software risk manager, and black duck software composition analysis tools. It serves electronics, financial services, automotive, medicine, energy, and industrial areas. The company was incorporated in 1986 and is headquartered in Sunnyvale, California.

About Intuit

Intuit Inc. provides financial management and compliance products and services for consumers, small businesses, self-employed, and accounting professionals in the United States, Canada, and internationally. The company operates in four segments: Small Business & Self-Employed, Consumer, Credit Karma, and ProTax. The Small Business & Self-Employed segment provides QuickBooks services, that includes financial and business management online services and desktop software, payroll solutions, time tracking, merchant payment processing solutions, and financing for small businesses; and Mailchimp services, such as e-commerce, marketing automation, and customer relationship management. This segment also offers QuickBooks online services and desktop software solutions comprising QuickBooks Online Advanced, a cloud-based solution; QuickBooks Enterprise, a hosted solution; and QuickBooks Self-Employed solution; payment-processing solutions, including credit and debit cards, Apple Pay, and ACH payment services; and financial supplies and financing for small businesses, as well as electronic filing of federal and state income tax returns. The Consumer segment provides TurboTax income tax preparation products and services. The Credit Karma segment offers consumers with a personal finance platform that provides personalized recommendations of home, auto, and personal loans, as well as credit cards and insurance products. The ProTax segment provides Lacerte, ProSeries, and ProFile desktop tax-preparation software products; and ProConnect Tax Online tax products, electronic tax filing service, and bank products and related services. It sells products and services through various sales and distribution channels, including multi-channel shop-and-buy experiences, websites and call centers, mobile application stores, and retail and other channels. The company was founded in 1983 and is headquartered in Mountain View, California.