Pegasystems (NASDAQ:PEGA – Get Free Report) and Bentley Systems (NASDAQ:BSY – Get Free Report) are both technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, profitability, analyst recommendations, earnings and risk.
Analyst Recommendations
This is a summary of current recommendations and price targets for Pegasystems and Bentley Systems, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Pegasystems | 2 | 7 | 6 | 0 | 2.27 |
| Bentley Systems | 0 | 5 | 10 | 0 | 2.67 |
Pegasystems currently has a consensus price target of $45.73, indicating a potential upside of 31.90%. Bentley Systems has a consensus price target of $44.77, indicating a potential upside of 4.92%. Given Pegasystems’ higher probable upside, analysts plainly believe Pegasystems is more favorable than Bentley Systems.
Profitability
This table compares Pegasystems and Bentley Systems’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Pegasystems | 16.86% | 35.22% | 15.55% |
| Bentley Systems | 18.10% | 28.43% | 9.69% |
Institutional & Insider Ownership
46.9% of Pegasystems shares are owned by institutional investors. Comparatively, 44.2% of Bentley Systems shares are owned by institutional investors. 48.4% of Pegasystems shares are owned by company insiders. Comparatively, 20.3% of Bentley Systems shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Dividends
Pegasystems pays an annual dividend of $0.12 per share and has a dividend yield of 0.3%. Bentley Systems pays an annual dividend of $0.28 per share and has a dividend yield of 0.7%. Pegasystems pays out 7.5% of its earnings in the form of a dividend. Bentley Systems pays out 30.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Bentley Systems has raised its dividend for 3 consecutive years. Bentley Systems is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Pegasystems and Bentley Systems”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Pegasystems | $1.75 billion | 3.25 | $393.44 million | $1.61 | 21.53 |
| Bentley Systems | $1.50 billion | 8.26 | $277.86 million | $0.91 | 46.89 |
Pegasystems has higher revenue and earnings than Bentley Systems. Pegasystems is trading at a lower price-to-earnings ratio than Bentley Systems, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Pegasystems has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, Bentley Systems has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500.
Summary
Pegasystems beats Bentley Systems on 9 of the 17 factors compared between the two stocks.
About Pegasystems
Pegasystems Inc. develops, markets, licenses, hosts, and supports enterprise software in the United States, rest of the Americas, the United Kingdom, rest of Europe, the Middle East, Africa, and the Asia-Pacific. The company provides Pega Infinity, a software portfolio comprising of Pega Customer Decision Hub, a real-time AI-powered decision engine to enhance customer acquisition and experiences across inbound, outbound, and paid media channels; Pega Customer Service to anticipate customer needs, connect customers to people and systems, and automate customer interactions to evolve the customer service experience, as well as to allow enterprises to deliver interactions across channels and enhance employee productivity; and Pega Platform, an intelligent automation software for increasing efficiency of clients’ processes and workflows. It also offers Situational Layer Cake that organizes logic into layers that map to the unique dimensions of a client’s business, such as customer types, lines of business, geographies, etc.; Pega Express Methodology and low code that connects enterprise data and systems to customer experience channels; Pega Cloud that allows clients to develop, test, and deploy applications; Pega Catalyst, which helps clients to transform and prototype their customer journeys; Pega Academy, which offers instructor-led and online training to its employees, clients, and partners; and global service assurance and client support services. It primarily markets its software and services to financial services, healthcare, communications and media, government, insurance, manufacturing and high tech, and consumer services markets through a direct sales force, as well as partnerships with technology providers and application developers. Pegasystems Inc. was incorporated in 1983 and is headquartered in Cambridge, Massachusetts.
About Bentley Systems
Bentley Systems, Incorporated, together with its subsidiaries, provides infrastructure engineering software solutions in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. The company offers open modeling engineering applications, such as MicroStation, OpenBridge, OpenBuildings, OpenCities, OpenComms, OpenFlows, OpenPlant, OpenRail, OpenRoads, OpenSite, OpenTower, OpenTunnel, OpenUtilities, and OpenWindowPower; and open simulation engineering applications, including ADINA, AutoPIPE, CUBE, DYNAMEQ, EMME, LEGION, Power Line Systems, RAM, SACS, SPIDA, and STAAD; and geoprofessional applications for modeling and simulation of near and deep subsurface conditions, including AGS, Central, GeoStudio, Imago, Leapfrog, MX Deposit, Oasis montaj, OpenGround, and PLAXIS. It also provides infrastructure cloud applications, such as ProjectWise, SYNCHRO, and AssetWise, as well as iTwin platform that enables users to create and curate cloud native 4D/5D digital representations of physical infrastructure assets consisting of iTwin Capture, iTwin Experience, and iTwin IoT platforms. The company serves civil, structural, geotechnical, subsurface, process engineers, architects, geospatial professionals, city and regional planners, contractors, fabricators, and operations and maintenance engineers. Bentley Systems, Incorporated was incorporated in 1984 and is headquartered in Exton, Pennsylvania.
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