Financial Review: Verisk Analytics (NASDAQ:VRSK) vs. Toast (NYSE:TOST)

Verisk Analytics (NASDAQ:VRSK) and Toast (NYSE:TOST) are both large-cap business services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitability, dividends, institutional ownership, risk and earnings.

Insider and Institutional Ownership

90.0% of Verisk Analytics shares are owned by institutional investors. Comparatively, 82.9% of Toast shares are owned by institutional investors. 0.4% of Verisk Analytics shares are owned by insiders. Comparatively, 13.3% of Toast shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

Verisk Analytics has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500. Comparatively, Toast has a beta of 1.74, meaning that its share price is 74% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Verisk Analytics and Toast, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Verisk Analytics	0	6	3	1	2.50
Toast	1	9	11	0	2.48

Verisk Analytics presently has a consensus target price of $285.80, suggesting a potential upside of 1.78%. Toast has a consensus target price of $32.75, suggesting a potential downside of 20.51%. Given Verisk Analytics’ stronger consensus rating and higher probable upside, research analysts clearly believe Verisk Analytics is more favorable than Toast.

Profitability

This table compares Verisk Analytics and Toast’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Verisk Analytics	32.65%	274.13%	20.34%
Toast	-1.05%	-3.84%	-2.34%

Earnings & Valuation

This table compares Verisk Analytics and Toast”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Verisk Analytics	$2.82 billion	14.04	$614.60 million	$6.41	43.81
Toast	$3.87 billion	5.02	-$246.00 million	($0.13)	-316.92

Verisk Analytics has higher earnings, but lower revenue than Toast. Toast is trading at a lower price-to-earnings ratio than Verisk Analytics, indicating that it is currently the more affordable of the two stocks.

Summary

Verisk Analytics beats Toast on 11 of the 15 factors compared between the two stocks.

About Verisk Analytics

Verisk Analytics, Inc. provides data analytics and technology solutions to the insurance markets in the United States and internationally. It offers policy language, prospective loss costs, policy writing and rating rules, and various underwriting solutions for risk selection and segmentation, pricing, and workflow optimization; property- and auto- specific rating and underwriting information solutions that allows clients to understand, quantify, underwrite, mitigate, and avoid potential loss for risks; catastrophe modeling solutions, which enables companies to identify, quantify, and plan for the financial consequences of catastrophes for use by insurers, reinsurers, intermediaries, financial institutions, and governments. The company also provides life insurance solutions for transforming current workflows in life insurance underwriting, claim insights, policy administration, unclaimed property/equity, compliance and fraud detection, and actuarial and portfolio modeling; Marketing Solutions, such as compliant, real-time decisioning, profitability, and risk assessment for inbound consumer interactions; and international underwriting and claims solutions. In addition, it offers claims insurance solutions, which provides analytics in fraud detection, compliance reporting, subrogation liability assessment, litigation, and repair cost estimation and valuation solutions; and casualty solutions, such as compliance, casualty claims decision support, and workflow automation solutions. Further, the company supplies software to the specialty insurance market. The company was founded in 1971 and is headquartered in Jersey City, New Jersey.

About Toast

Toast, Inc. operates a cloud-based digital technology platform for the restaurant industry in the United States, Ireland, and India. The company offers software products for restaurant operations and point of sale, such as Toast POS, Toast now, multi-location management, kitchen display system, Toast mobile order and pay, Toast catering and events, Toast invoicing, Toast tables, and restaurant retail; and hardware products, including Toast flex, Toast flex for guest, Toast go 2, Toast tap, kiosks, and Delphi by Toast. It provides toast online ordering and toast takeout, first-party delivery toast delivery services, and third-party delivery integrations and orders hub; and loyalty, email marketing, and toast gift cards. In addition, the company offers payroll and team management, Sling by Toast, Toast pay card and payout, and tips manager, as well as partner-enabled products comprising insurance and benefits; supply chain and accounting products, such as xtraCHEF by toast; and financial technology solutions consisting of payment processing, toast capital, and purchase plans. Further, it offers reporting and analytics, Toast shop, and Toast partner connect and application programming interfaces. The company was formerly known as Opti Systems, Inc. and changed its name to Toast, Inc. in May 2012. Toast, Inc. was incorporated in 2011 and is headquartered in Boston, Massachusetts.