Financial Analysis: Paylocity (NASDAQ:PCTY) & Information Analysis (OTCMKTS:IAIC)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Paylocity	14.76%	22.45%	5.35%
Information Analysis	3.72%	18.48%	9.33%

Earnings and Valuation

This table compares Paylocity and Information Analysis”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Paylocity	$1.50 billion	6.95	$206.77 million	$3.90	47.75
Information Analysis	$13.90 million	0.00	$410,000.00	$0.04	N/A

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

Institutional and Insider Ownership

94.8% of Paylocity shares are held by institutional investors. 21.9% of Paylocity shares are held by insiders. Comparatively, 23.8% of Information Analysis shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings for Paylocity and Information Analysis, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Paylocity	0	2	14	0	2.88
Information Analysis	0	0	0	0	0.00

Paylocity currently has a consensus target price of $233.25, indicating a potential upside of 25.24%. Given Paylocity’s stronger consensus rating and higher possible upside, analysts clearly believe Paylocity is more favorable than Information Analysis.

Risk & Volatility

Paylocity 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 3.25, meaning that its share price is 225% more volatile than the S&P 500.

Summary

Paylocity beats Information Analysis on 9 of the 13 factors compared between the two stocks.

About Paylocity

Paylocity Holding Corporation engages in the provision of cloud-based human capital management and payroll software solutions for workforce in the United States. The company offers payroll software solution for global payroll, expense management, tax services, on demand payment, and garnishment managed services; and time and labor management software for time and attendance, scheduling, and time collection. It also provides human resources (HR) software solutions for employee self-service, compliance, HR edge, data analytics, and workflows and documents, as well as human resource management system; talent management system for recruiting, onboarding, performance, compensation, and learning; and benefits administration software. In addition, the company offers employee experience platform for community, employee voice, recognition and rewards, video, and modern workforce index; HR reporting software; and mobile HR solutions. Further, it provides implementation and training, client, and tax and regulatory services. The company serves for-profit and non-profit organizations across industries, including business services, financial services, healthcare, manufacturing, restaurants, retail, technology, and others. It sells its products through sales representatives. The company was founded in 1997 and is headquartered in Schaumburg, Illinois.

About Information Analysis

Information Analysis, Inc. provides information technology services. The firm engages in the business of modernizing client information systems, developing and maintaining information technology systems, and performing consulting services to government and commercial organizations. It specializes in legacy systems modernization, ebusiness solutions, enterprise portals, system migration and re-hosting services, and enterprise application integration. The company was founded by Sandor Rosenberg in 1979 and is headquartered in Fairfax, VA.