Financial Contrast: Verisign (VRSN) vs. Aspen Technology (AZPN)

Verisign (NASDAQ: VRSN) and Aspen Technology (NASDAQ:AZPN) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, analyst recommendations, institutional ownership, profitability and risk.

Analyst Recommendations

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This is a breakdown of current ratings and price targets for Verisign and Aspen Technology, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Verisign	1	3	0	0	1.75
Aspen Technology	2	2	3	0	2.14

Verisign currently has a consensus price target of $109.25, suggesting a potential downside of 14.99%. Aspen Technology has a consensus price target of $81.86, suggesting a potential downside of 12.54%. Given Aspen Technology’s stronger consensus rating and higher probable upside, analysts clearly believe Aspen Technology is more favorable than Verisign.

Profitability

This table compares Verisign and Aspen Technology’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Verisign	40.41%	-37.57%	16.68%
Aspen Technology	33.19%	-61.04%	73.96%

Institutional & Insider Ownership

100.0% of Aspen Technology shares are held by institutional investors. 0.9% of Verisign shares are held by company insiders. Comparatively, 0.8% of Aspen Technology shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

Verisign has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500. Comparatively, Aspen Technology has a beta of 1.21, meaning that its stock price is 21% more volatile than the S&P 500.

Valuation & Earnings

This table compares Verisign and Aspen Technology’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Verisign	$1.17 billion	10.70	$457.24 million	$3.68	34.92
Aspen Technology	$482.94 million	13.84	$162.19 million	$2.11	44.36

Verisign has higher revenue and earnings than Aspen Technology. Verisign is trading at a lower price-to-earnings ratio than Aspen Technology, indicating that it is currently the more affordable of the two stocks.

Summary

Aspen Technology beats Verisign on 8 of the 14 factors compared between the two stocks.

Verisign Company Profile

VeriSign, Inc. provides domain name registry services and Internet security worldwide. The company offers registry services that operate the authoritative directory of .com, .net, .cc, .tv, .gov, .jobs, .edu, .name, and other domain names. Its registry services allow individuals and organizations to establish their online identities. The company also provides infrastructure assurance services, including distributed denial of service protection and managed domain name system services. It serves financial institutions, software-as-a-service providers, e-commerce providers, and media companies through direct sales and indirect channels. The company was founded in 1995 and is headquartered in Reston, Virginia.

Aspen Technology Company Profile

Aspen Technology, Inc., together with its subsidiaries, provides software and services in the United States, Europe, and internationally. It operates through two segments, Subscription and Software, and Services. It supplies asset optimization solutions that optimize asset design, operations, and maintenance lifecycle in various industrial environments. The company's software suites include aspenONE Engineering, aspenONE Manufacturing and Supply Chain, and aspenONE Asset Performance Management, which are integrated applications that allow end users to design process manufacturing environments, forecast and simulate potential actions, monitor operational performances, predict the reliability of an asset and equipment failure, and manage planning and scheduling activities, as well as collaborate across these functions and activities. It also provides software maintenance and support, professional, and training services. The company's customers include companies that are engaged in the process and other industries, including energy, chemicals, engineering, and construction, as well as pharmaceuticals, transportation, power, metals and mining, pulp and paper, and consumer packaged goods. Aspen Technology, Inc. was founded in 1981 and is headquartered in Bedford, Massachusetts.