Critical Review: Thomson Reuters (NASDAQ:TRI) and CACI International (NYSE:CACI)

Thomson Reuters (NASDAQ:TRI) and CACI International (NYSE:CACI) are both large-cap industrials companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, dividends, analyst recommendations and earnings.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Thomson Reuters and CACI International, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Thomson Reuters	1	5	10	1	2.65
CACI International	0	4	8	0	2.67

Thomson Reuters currently has a consensus price target of $142.83, suggesting a potential upside of 34.90%. CACI International has a consensus price target of $697.55, suggesting a potential upside of 7.88%. Given Thomson Reuters’ higher possible upside, equities research analysts plainly believe Thomson Reuters is more favorable than CACI International.

Valuation and Earnings

This table compares Thomson Reuters and CACI International”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Thomson Reuters	$7.48 billion	6.17	$1.50 billion	$3.76	28.16
CACI International	$9.57 billion	1.49	$535.81 million	$24.15	26.78

Thomson Reuters has higher earnings, but lower revenue than CACI International. CACI International is trading at a lower price-to-earnings ratio than Thomson Reuters, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Thomson Reuters has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500. Comparatively, CACI International has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500.

Institutional & Insider Ownership

17.3% of Thomson Reuters shares are held by institutional investors. Comparatively, 86.4% of CACI International shares are held by institutional investors. 1.1% of CACI International shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Thomson Reuters and CACI International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Thomson Reuters	21.22%	15.82%	10.27%
CACI International	5.60%	15.65%	6.45%

Summary

Thomson Reuters beats CACI International on 10 of the 15 factors compared between the two stocks.

About Thomson Reuters

Thomson Reuters Corporation provides business information services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates in five segments: Legal Professionals, Corporates, Tax & Accounting Professionals, Reuters News, and Global Print. The Legal Professionals segment offers research and workflow products focusing on legal research and integrated legal workflow solutions that combine content, tools, and analytics to law firms and governments. The Corporates segment provides a suite of content-enabled technology solutions for legal, tax, regulatory, compliance, and IT professionals. The Tax & Accounting Professionals segment offers research and workflow products focusing on tax offerings and automating tax workflows to tax, accounting, and audit professionals in accounting firms. The Reuters News segment provides business, financial, and international news to media organizations, professional, and news consumers through news agency and industry events. The Global Print segment offers legal and tax information primarily in print format to legal and tax professionals, governments, law schools, and corporations. The company was formerly known as The Thomson Corporation and changed its name to Thomson Reuters Corporation in April 2008. The company was founded in 1851 and is headquartered in Toronto, Canada. Thomson Reuters Corporation is a subsidiary of The Woodbridge Company Limited.

About CACI International

CACI International Inc, through its subsidiaries, engages in the provision of expertise and technology to enterprise and mission customers in support of national security in the intelligence, defense, and federal civilian sectors. The company operates through two segments, Domestic Operations and International Operations. The Domestic Operations segment offers digital solutions by modernizing enterprise and agency-unique applications, enterprise infrastructure, and business processes; C4ISR solutions, including command, control, communications, and computer (C4), as well as intelligence, surveillance, and reconnaissance (ISR) technology and networks; and cyber solutions for cybersecurity, cyberspace, electronic warfare, and signals intelligence operations. This segment also provides space solutions, comprising intelligence fusion, data analytic, and decision support, as well as logistics solutions; engineering services, such as platform integration, modernization and sustainment, system engineering, naval architecture, training and simulation, and logistics engineering; design, implement, protect, and manage secure enterprise IT solutions for federal agencies; and mission support solutions, that include analytic services, as well as scenario-based instruction across the spectrum of intelligence processing, collection, and products. The International Operations segment provides a range of IT services, proprietary data, and software products to the commercial and government customers in the United Kingdom, continental Europe, and internationally. The company was founded in 1962 and is headquartered in Reston, Virginia.