Head to Head Contrast: Take-Two Interactive Software (NASDAQ:TTWO) and Paycom Software (NYSE:PAYC)

Take-Two Interactive Software (NASDAQ:TTWO) and Paycom Software (NYSE:PAYC) are both large-cap consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, dividends, risk and earnings.

Volatility and Risk

Take-Two Interactive Software has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500. Comparatively, Paycom Software has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500.

Insider and Institutional Ownership

95.5% of Take-Two Interactive Software shares are held by institutional investors. Comparatively, 87.8% of Paycom Software shares are held by institutional investors. 1.5% of Take-Two Interactive Software shares are held by insiders. Comparatively, 12.6% of Paycom Software shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Take-Two Interactive Software and Paycom Software”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Take-Two Interactive Software	$5.46 billion	6.04	-$3.74 billion	($21.16)	-8.87
Paycom Software	$1.69 billion	7.99	$340.79 million	$8.31	28.25

Paycom Software has lower revenue, but higher earnings than Take-Two Interactive Software. Take-Two Interactive Software is trading at a lower price-to-earnings ratio than Paycom Software, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Take-Two Interactive Software and Paycom Software’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Take-Two Interactive Software	-66.38%	0.51%	0.25%
Paycom Software	25.78%	32.90%	11.07%

Analyst Ratings

This is a breakdown of current ratings and target prices for Take-Two Interactive Software and Paycom Software, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Take-Two Interactive Software	0	2	18	1	2.95
Paycom Software	0	11	1	0	2.08

Take-Two Interactive Software currently has a consensus price target of $191.75, suggesting a potential upside of 2.20%. Paycom Software has a consensus price target of $193.67, suggesting a potential downside of 17.51%. Given Take-Two Interactive Software’s stronger consensus rating and higher probable upside, research analysts plainly believe Take-Two Interactive Software is more favorable than Paycom Software.

Summary

Paycom Software beats Take-Two Interactive Software on 9 of the 15 factors compared between the two stocks.

About Take-Two Interactive Software

Take-Two Interactive Software, Inc. develops, publishes, and markets interactive entertainment solutions for consumers worldwide. It develops and publishes action/adventure products under the Grand Theft Auto, LA Noire, Max Payne, Midnight Club, and Red Dead Redemption names, as well as other franchises. The company also publishes various entertainment properties across various platforms and a range of genres, such as shooter, action, role-playing, strategy, sports, and family/casual entertainment under the BioShock, Mafia, Sid Meier’s Civilization, XCOM series, Borderlands, and Tiny Tina’s Wonderland names. In addition, it publishes sports simulation titles comprising NBA 2K series, a basketball video game; the WWE 2K professional wrestling series; mobile titles, including WWE SuperCard; and PGA TOUR 2K. Further, the company offers Kerbal Space Program and OlliOlli World; free-to-play mobile games, such as CSR Racing, Dragon City, Empires & Puzzles, FarmVille, Golf Rival, Harry Potter: Puzzles & Spells, Match Factory!, Merge Dragons!, Merge Magic!, Monster Legends, Toon Blast, Top Eleven, Top Troops, Toy Blast, Two Dots, Words With Friends, and Zynga Poker; and hyper-casual mobile titles, including Fill the Fridge!, Parking Jam 3D, Power Slap, Pull the Pin, Twisted Tangle, and Tangled Snakes. Its products are designed for console gaming systems; personal computers; and mobiles comprising smartphones and tablets. The company provides its products through physical retail, digital download, online platforms, and cloud streaming services. Take-Two Interactive Software, Inc. was incorporated in 1993 and is based in New York, New York.

About Paycom Software

Paycom Software, Inc. provides cloud-based human capital management (HCM) solution delivered as software-as-a-service for small to mid-sized companies in the United States. It offers functionality and data analytics that businesses need to manage the employment life cycle from recruitment to retirement. The company's HCM solution provides a suite of applications in the areas of talent acquisition, including applicant tracking, candidate tracker, background checks, on-boarding, e-verify, and tax credit services; and time and labor management, such as time and attendance, scheduling, time-off requests, labor allocation, labor management reports/push reporting, geofencing/geotracking, and Microfence, a proprietary Bluetooth. Its HCM solution also offers payroll applications comprising better employee transaction interface, payroll and tax management, payroll card, Everyday, Paycom pay, Client Action Center, expense management, mileage tracker/fixed and variable rates, garnishment administration, and GL concierge applications; and talent management applications that include employee self-service, compensation budgeting, performance management, position management, and Paycom learning, as well as my analytics. In addition, its HCM solution provides manager on-the-go that gives supervisors and managers the ability to perform a variety of tasks, such as approving time-off requests and expense reimbursements; direct data exchange; ask here, a tool for direct line of communication to ask work-related questions; document and checklist; government and compliance; benefits administration/benefits to carrier; benefit enrollment service; COBRA administration; personnel action and performance discussion forms; surveys; 401(k) reporting; report center; and affordable care act applications, as well as Clue, which securely collects, tracks, and manages the vaccination and testing data of the workforce. Paycom Software, Inc. was founded in 1998 and is based in Oklahoma City, Oklahoma.