Analyzing IHS (IHS) & Thomson Reuters Corp (TRI)

IHS (NYSE: IHS) and Thomson Reuters Corp (NYSE:TRI) are both industrials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, dividends, risk and institutional ownership.

Insider & Institutional Ownership

26.1% of Thomson Reuters Corp shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Thomson Reuters Corp pays an annual dividend of $1.38 per share and has a dividend yield of 2.9%. IHS does not pay a dividend. Thomson Reuters Corp pays out 33.9% of its earnings in the form of a dividend. Thomson Reuters Corp has raised its dividend for 9 consecutive years.

Profitability

This table compares IHS and Thomson Reuters Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
IHS 7.63% 8.19% 2.73%
Thomson Reuters Corp 26.81% 13.64% 6.42%

Volatility & Risk

IHS has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500. Comparatively, Thomson Reuters Corp has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500.

Valuation & Earnings

This table compares IHS and Thomson Reuters Corp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
IHS N/A N/A N/A $3.58 32.75
Thomson Reuters Corp $11.20 billion 2.99 $2.52 billion $4.07 11.51

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

Analyst Recommendations

This is a summary of current ratings for IHS and Thomson Reuters Corp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IHS 0 2 1 0 2.33
Thomson Reuters Corp 1 6 6 0 2.38

IHS presently has a consensus target price of $44.67, suggesting a potential downside of 61.90%. Thomson Reuters Corp has a consensus target price of $51.92, suggesting a potential upside of 10.84%. Given Thomson Reuters Corp’s stronger consensus rating and higher probable upside, analysts clearly believe Thomson Reuters Corp is more favorable than IHS.

Summary

Thomson Reuters Corp beats IHS on 11 of the 13 factors compared between the two stocks.

IHS Company Profile

IHS Inc. develops source of information, insight and analytics in different areas of business. The Company’s segments include Resources, Transportation and Consolidated Markets & Solutions. The Company’s Resources segment includes its Energy and Chemicals product offerings. Its Transportation segment includes its Automotive; Maritime & Trade, and Aerospace, Defense & Security product offerings. Its Consolidated Markets & Solutions segment includes its Product Design; Technology, Media & Telecom, and Economics & Country Risk product offerings. It provides authoritative analysis and forecasts of sales and production for light vehicles, medium and heavy commercial vehicles, powertrain, components and technology systems across various markets. Its product design offerings include content and analysis on various engineering and technical standards, codes, reference books, journals, and other scientific and technical documents, as well as software-based engineering decision engines.

Thomson Reuters Corp Company Profile

Thomson Reuters Corporation (Thomson Reuters) is a Canada-based provider of news and information for professional markets. The Company is organized in three business units: Financial & Risk, Legal, and Tax & Accounting. The Financial & Risk unit is a provider of critical news, information and analytics, enabling transactions and connecting communities of trading, investment, financial and corporate professionals. The Legal unit is a provider of critical online and print information, decision tools, software and services that support legal, investigation, business and government professionals around the world. The Tax & Accounting unit is a provider of integrated tax compliance and accounting information, software and services for professionals in accounting firms, corporations, law firms and government. The Company also operates Reuters, Global Growth Organization (GGO) and Enterprise Technology & Operations (ET&O). Thomson Reuters operates in over 100 countries.

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