Financial Comparison: ServiceNow (NYSE:NOW) versus Science Applications International (NASDAQ:SAIC)

ServiceNow (NYSE:NOW) and Science Applications International (NASDAQ:SAIC) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, earnings and valuation.

Insider & Institutional Ownership

87.2% of ServiceNow shares are owned by institutional investors. Comparatively, 76.0% of Science Applications International shares are owned by institutional investors. 0.4% of ServiceNow shares are owned by insiders. Comparatively, 0.4% of Science Applications International shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares ServiceNow and Science Applications International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ServiceNow	13.66%	19.23%	9.30%
Science Applications International	5.35%	33.36%	9.90%

Risk & Volatility

ServiceNow has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500. Comparatively, Science Applications International has a beta of 0.44, suggesting that its share price is 56% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings for ServiceNow and Science Applications International, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ServiceNow	1	3	31	2	2.92
Science Applications International	0	1	0	0	2.00

ServiceNow presently has a consensus target price of $1,159.66, suggesting a potential upside of 26.29%. Given ServiceNow’s stronger consensus rating and higher possible upside, analysts clearly believe ServiceNow is more favorable than Science Applications International.

Earnings and Valuation

This table compares ServiceNow and Science Applications International”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ServiceNow	$10.98 billion	17.39	$1.43 billion	$7.94	115.65
Science Applications International	$7.48 billion	0.58	$362.00 million	$8.26	11.35

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

Summary

ServiceNow beats Science Applications International on 11 of the 15 factors compared between the two stocks.

About ServiceNow

ServiceNow, Inc. provides end to-end intelligent workflow automation platform solutions for digital businesses in the North America, Europe, the Middle East and Africa, Asia Pacific, and internationally. The company operates the Now platform for end-to-end digital transformation, artificial intelligence, machine learning, robotic process automation, process mining, performance analytics, and collaboration and development tools. It also provides asset management, cloud observability, integrated risk management; information technology (IT) service management applications; IT service management product suite for enterprise's employees, customers, and partners; strategic portfolio management product suite; IT operations management product that connects a customer's physical and cloud-based IT infrastructure; IT asset management; and security operations that connects with internal and third party. In addition, the company offers integrated risk management product to manage risk and resilience; environmental, social and governance management product; human resources, legal, and workplace service delivery products; customer service management product; and field service management applications. Further, the company provides app engine product; automation engine; platform privacy and security product; and source-to-pay operations. It serves to government, financial services, healthcare, telecommunications, manufacturing, IT services, technology, oil and gas, education, and consumer products through service providers and resale partners. The company was formerly known as Service-now.com and changed its name to ServiceNow, Inc. in May 2012. ServiceNow, Inc. was founded in 2004 and is headquartered in Santa Clara, California.

About Science Applications International

Science Applications International Corporation provides technical, engineering, and enterprise information technology (IT) services primarily in the United States. The company’s offerings include engineering; technology integration; IT modernization; maintenance of ground and maritime systems; logistics; training and simulation; operation and program support services; and end-to-end services, such as design, development, integration, deployment, management and operations, sustainment, and security of its customers’ IT infrastructure, as well as cloud migration, managed services, infrastructure modernization, and enterprise IT-as-a-service solutions. It serves the U.S. military comprising Army, Air Force, Navy, Marines, and Coast Guard; Department of Defense agencies; National Aeronautics and Space Administration; the U.S. Department of State; Department of Justice; Department of Homeland Security; and various intelligence community agencies, as well as U.S. federal civilian agencies. The company was formerly known as SAIC Gemini, Inc. and changed its name to Science Applications International Corporation in September 2013. Science Applications International Corporation was founded in 1969 and is headquartered in Reston, Virginia.