National Instruments (NATI) and Kayak Software (KYAK) Critical Review

National Instruments (NASDAQ: NATI) and Kayak Software (NASDAQ:KYAK) are both technology companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, profitability and risk.

Dividends

National Instruments pays an annual dividend of $0.84 per share and has a dividend yield of 1.9%. Kayak Software does not pay a dividend. National Instruments pays out 103.7% 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 and Earnings

This table compares National Instruments and Kayak Software’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
National Instruments $1.23 billion 4.72 $82.73 million $0.81 54.70
Kayak Software N/A N/A N/A $0.43 93.19

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

Analyst Ratings

This is a summary of recent recommendations and price targets for National Instruments and Kayak Software, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National Instruments 0 1 1 0 2.50
Kayak Software 0 0 0 0 N/A

National Instruments presently has a consensus price target of $40.00, indicating a potential downside of 9.73%. Given National Instruments’ higher possible upside, analysts plainly believe National Instruments is more favorable than Kayak Software.

Profitability

This table compares National Instruments and Kayak Software’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National Instruments 8.72% 10.16% 7.64%
Kayak Software 2.58% 2.19% 1.98%

Institutional & Insider Ownership

78.0% of National Instruments shares are held by institutional investors. 9.9% of National Instruments shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

National Instruments beats Kayak Software on 10 of the 12 factors compared between the two stocks.

National Instruments Company Profile

National Instruments Corporation (NI) designs, manufactures and sells systems to engineers and scientists. The Company offers a line of measurement, automation and control products. It offers products, technology and services, which include system design software, programming tools, application software, modular hardware products and related driver software, production test systems, NI education platform, software products for teaching and hardware products for teaching. It also offers NI Services, including hardware services and maintenance, software maintenance services, and training and certification. Its products are used across various industries in a range of applications, including research and development, simulation and modeling, prototype and validation, production testing and industrial control and field and factory service and repair. It serves various industries and applications, such as consumer electronics, commercial aerospace, telecommunications and others.

Kayak Software Company Profile

Centralizing online travel deals is smooth sailing for Kayak Software. Through its websites (KAYAK.com, swoodoo.com, and SideStep.com) in about 15 countries, the company displays rates on airfare, hotels, rental cars, and cruises from more than 500 other travel websites. Kayak Software offers fare information from Continental Airlines and American Airlines, as well as prices from Funjet Vacations, Marriott International, and InterContinental Hotel Group, among others. In addition to booking, the firm’s websites and mobile applications provide destination information, travel tips, member discounts, and hotel descriptions. Founded in 2004, Kayak Software filed to go public in late 2010.

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