Critical Review: National Instruments (NASDAQ:NATI) versus Information Analysis (NASDAQ:IAIC)

National Instruments (NASDAQ:NATI) and Information Analysis (OTCMKTS:IAIC) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, earnings, profitability, valuation and dividends.

Insider & Institutional Ownership

79.3% of National Instruments shares are owned by institutional investors. 1.8% of National Instruments shares are owned by insiders. Comparatively, 26.4% of Information Analysis shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares National Instruments and Information Analysis’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National Instruments 11.34% 15.19% 11.11%
Information Analysis -2.40% -11.40% -6.59%

Volatility and Risk

National Instruments has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, Information Analysis has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for National Instruments and Information Analysis, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National Instruments 0 3 0 0 2.00
Information Analysis 0 0 0 0 N/A

National Instruments presently has a consensus price target of $48.00, suggesting a potential upside of 11.42%. Given National Instruments’ higher probable upside, equities analysts clearly believe National Instruments is more favorable than Information Analysis.

Dividends

National Instruments pays an annual dividend of $1.00 per share and has a dividend yield of 2.3%. Information Analysis does not pay a dividend. National Instruments pays out 74.6% of its earnings in the form of a dividend. National Instruments has increased its dividend for 5 consecutive years.

Valuation and Earnings

This table compares National Instruments and Information Analysis’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
National Instruments $1.36 billion 4.18 $155.06 million $1.34 32.15
Information Analysis $8.93 million 0.29 -$50,000.00 N/A N/A

National Instruments has higher revenue and earnings than Information Analysis.

Summary

National Instruments beats Information Analysis on 11 of the 13 factors compared between the two stocks.

National Instruments Company Profile

National Instruments Corporation provides a software-centric platform and systems to engineers and scientists worldwide. Its programming environments software includes LabVIEW, a graphical application software package to visualize hardware configuration, measurement data, and debugging of application; LabWindows/CVI, an ANSI C integrated development environment and engineering toolbox with built-in libraries for measurement, analysis, and engineering UI design; and NI Measurement Studio, a suite of .NET tools designed for building engineering applications in Microsoft Visual Studio to acquire, analyze, and display measurement data. The company's application software comprises TestStand, which is used for automated test and measurement applications in a manufacturing environment; VeriStand, a ready-to-use software environment for configuring real-time testing applications; Flexlogger for quick sensor configuration and data logging of mixed signals to verify electromechanical systems; and InsightCM Enterprise, a software solution with integrated hardware options for monitoring ancillary rotating equipment. Its systems and data management software include DIAdem, which is configuration-based technical data management, analysis, and report generation tools to mine and analyze engineering and measurement data; and SystemLink, a systems management software that enables the mass coordination of connected devices, software deployments, and data communications throughout a distributed system. The company also offers PXI hardware form factor that combines PC software and PCI hardware with advanced instrumentation capabilities; NI C-series data acquisition and control products; and NI semiconductor test systems, as well as software and hardware maintenance, and training and certification services. It serves semiconductor, transportation, and aerospace and defense industries, as well as government agencies. The company was founded in 1976 and is headquartered in Austin, Texas.

Information Analysis Company Profile

Information Analysis Incorporated engages in developing and maintaining information technology systems, modernizing client information systems, and performing professional services to government and commercial organizations in the United States. The company develops and provides Web-based and mobile device solutions, including electronic forms conversions for various agencies of the federal government, data analytics, and legacy software migration and modernization. It also sells third-party software products, as well as provides maintenance services. The company was founded in 1979 and is headquartered in Fairfax, Virginia.

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