Head to Head Comparison: ACI Worldwide (NASDAQ:ACIW) & Open Text (NASDAQ:OTEX)

ACI Worldwide (NASDAQ:ACIW) and Open Text (NASDAQ:OTEX) are both mid-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, earnings, valuation, profitability and analyst recommendations.

Profitability

This table compares ACI Worldwide and Open Text’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ACI Worldwide	11.51%	16.76%	7.89%
Open Text	9.91%	24.77%	7.27%

Insider & Institutional Ownership

94.7% of ACI Worldwide shares are held by institutional investors. Comparatively, 70.4% of Open Text shares are held by institutional investors. 1.1% of ACI Worldwide shares are held by insiders. Comparatively, 10.6% of Open Text shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares ACI Worldwide and Open Text”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ACI Worldwide	$1.76 billion	2.47	$226.66 million	$1.99	21.47
Open Text	$5.17 billion	1.10	$435.87 million	$2.05	11.45

Open Text has higher revenue and earnings than ACI Worldwide. Open Text is trading at a lower price-to-earnings ratio than ACI Worldwide, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for ACI Worldwide and Open Text, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ACI Worldwide	1	1	3	0	2.40
Open Text	0	10	4	0	2.29

ACI Worldwide currently has a consensus target price of $60.00, indicating a potential upside of 40.45%. Open Text has a consensus target price of $34.67, indicating a potential upside of 47.71%. Given Open Text’s higher probable upside, analysts plainly believe Open Text is more favorable than ACI Worldwide.

Risk & Volatility

ACI Worldwide has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, Open Text has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500.

Summary

Open Text beats ACI Worldwide on 8 of the 14 factors compared between the two stocks.

About ACI Worldwide

ACI Worldwide, Inc., a software company, develops, markets, installs, and supports a range of software products and solutions for facilitating digital payments in the United States and internationally. The company operates in three segments: Banks, Merchants, and Billers. The company offers ACI Acquiring, a solution to process credit, debit, and prepaid card transactions, deliver digital innovation, and fraud prevention; ACI Issuing, a digital payment issuing solution for new payment offering; and ACI Enterprise Payments Platform that provides payment processing and orchestration capabilities for digital payments. It also provides ACI Low Value Real-Time Payments, a platform for processing real-time payments; and ACI High Value Real-Time Payments, a payments engine that offers multi-bank, multi-currency, 24×7 payment processing, and SWIFT messaging. In addition, the company offers ACI Payments Orchestration Platform for optimizing payments; omni-channel payment platform; ACI Fraud Management, a real-time approach to fraud management; and ACI Speedpay, an integrated suite of digital billing, payment, disbursement, and communication services. The company offers electronic bill presentment and payment services to consumer finance, insurance, healthcare, higher education, utility, government, telecommunications, and mortgage sectors; implementation services, include product installations and configurations, and custom software modifications; and business and technical consultancy, on-site support, product education, and testing services, as well as distributes or acts as a sales agent for software developed by third parties. It markets its products under the ACI Worldwide brand. The company was formerly known as Transaction Systems Architects, Inc. and changed its name to ACI Worldwide, Inc. in July 2007. The company was founded in 1975 and is based in Elkhorn, Nebraska.

About Open Text

Open Text Corporation provides information management software and solutions. The company offers content services, which includes content collaboration and intelligent capture to records management, collaboration, e-signatures, and archiving; and operates experience cloud platform that provides customer experience and web content management, digital asset management, customer analytics, AI and insights, e-discovery, digital fax, omnichannel communications, secure messaging, and voice of customer, as well as customer journey, testing, and segmentation. It also provides cybersecurity cloud solutions to protect, prevent, detect, respond and quickly recover from threats across endpoints, network, applications, IT infrastructure and data, AI-led threat intelligence; and to protect critical information and processes through threat intelligence, forensics, identity, encryption, and cloud-based application security. In addition, the company offers business network cloud for digital supply chains and secure e-commerce ecosystems including digitize and automate procure-to-pay and order-to-cash processes; IT operations management cloud for automation and advancement of IT support and asset management; and analytics & AI cloud solutions that offers artificial intelligence with practical usage to provide organizations with actionable insights and better automation, such as visualizations, advanced natural language processing and understanding, and integrated computer vision capabilities. In addition, it provides application automation cloud, developers cloud, and services. Further, it has strategic partnerships with SAP SE, Google Cloud, Amazon AWS, Microsoft Corporation, Oracle Corporation, Salesforce.com Corporation, DXC Technology Company, Accenture plc, Capgemini Technology Services SAS, Deloitte Consulting LLP, Hewlett Packard Enterprises, and Tata Consultancy Services. Open Text Corporation was incorporated in 1991 and is headquartered in Waterloo, Canada.