Head-To-Head Review: Trend Micro (TMICY) vs. SPS Commerce (SPSC)

Trend Micro (OTCMKTS:TMICY) and SPS Commerce (NASDAQ:SPSC) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, earnings, profitability, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares Trend Micro and SPS Commerce’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Trend Micro 17.65% 16.13% 8.56%
SPS Commerce 9.62% 8.17% 6.85%

Institutional & Insider Ownership

0.2% of Trend Micro shares are owned by institutional investors. Comparatively, 95.9% of SPS Commerce shares are owned by institutional investors. 3.3% of SPS Commerce shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Trend Micro pays an annual dividend of $2.46 per share and has a dividend yield of 4.9%. SPS Commerce does not pay a dividend. Trend Micro pays out 133.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation & Earnings

This table compares Trend Micro and SPS Commerce’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Trend Micro $1.45 billion 4.83 $257.66 million $1.84 27.16
SPS Commerce $248.24 million 7.31 $23.87 million $1.22 85.12

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for Trend Micro and SPS Commerce, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Trend Micro 0 0 0 0 N/A
SPS Commerce 0 1 7 0 2.88

SPS Commerce has a consensus price target of $97.13, suggesting a potential downside of 6.48%. Given SPS Commerce’s higher probable upside, analysts plainly believe SPS Commerce is more favorable than Trend Micro.

Volatility and Risk

Trend Micro has a beta of 0.5, suggesting that its stock price is 50% less volatile than the S&P 500. Comparatively, SPS Commerce has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500.

Summary

SPS Commerce beats Trend Micro on 8 of the 15 factors compared between the two stocks.

Trend Micro Company Profile

Trend Micro Incorporated develops and sells security solutions primarily in Japan. The company offers hybrid cloud security solutions, such as data center, cloud, and virtualization security products; network security solutions, including integrated advanced threat prevention and advanced threat detection solutions; user protection solutions comprising endpoint and gateway suites, endpoint security, email security, Web security, SaaS application security, and endpoint detection and response; and support services. It serves finance, insurance, and retail industries, as well as government institutions. Trend Micro Incorporated has a partnership with Moxa Inc. to develop solutions to protect industrial Internet of Things environments; and strategic partnership with Luxoft Holding, Inc. to offer intrusion detection systems and intrusion prevention systems to detect, mitigate, and respond to cyber-attacks on connected cars. The company was founded in 1988 and is headquartered in Tokyo, Japan.

SPS Commerce Company Profile

SPS Commerce, Inc. provides cloud-based supply chain management solutions worldwide. It provides solutions through the SPS Commerce platform, a cloud-based product suite that enhances the way retailers, suppliers, distributors, logistics firms, and other trading partners manage and fulfill orders, manage sell-through performance, and source new items. The company offers Trading Partner Fulfillment solution, which provides fulfillment automation and replaces or augments an organization's existing trading partner electronic communication infrastructure; Trading Partner Analytics solution that comprises data analytics applications to enhance visibility and analysis of customers supply chains; and Trading Partner Assortment solution to manage individual attributes associated with each item a retailer or supplier sells. It also provides Trading Partner Sourcing solution that enables retailers to source providers of new items, suppliers to connect with new retailers, and retailing community; Trading Partner Community Development solution, which offers communications programs that enables retailers, suppliers, and emerging providers of value-added products and services to establish trading partner relationships with new trading partners to expand their businesses; and Other Trading Partner Solutions, such as barcode labeling, planogram services, and scan and pack application that helps trading partners process information to streamline the picking and packaging process. The company sells its solutions primarily through retail sales professionals and supplier sales representatives to small- to mid-sized suppliers in the consumer packaged goods industry, as well as retailers, distributors, third-party logistics providers, and other trading partners. The company was formerly known as St. Paul Software, Inc. and changed its name to SPS Commerce, Inc. in May 2001. SPS Commerce, Inc. was incorporated in 1987 and is headquartered in Minneapolis, Minnesota.

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