Financial Survey: Switch (SWCH) versus Sabre (SABR)

Switch (NYSE: SWCH) and Sabre (NASDAQ:SABR) are both mid-cap business services companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, valuation, risk, institutional ownership, analyst recommendations, earnings and profitability.

Profitability

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This table compares Switch and Sabre’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Switch	N/A	N/A	N/A
Sabre	6.93%	49.84%	6.21%

Analyst Ratings

This is a breakdown of recent ratings for Switch and Sabre, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Switch	0	5	7	0	2.58
Sabre	1	2	7	0	2.60

Switch currently has a consensus price target of $20.00, suggesting a potential upside of 61.16%. Sabre has a consensus price target of $25.00, suggesting a potential downside of 3.66%. Given Switch’s higher possible upside, analysts clearly believe Switch is more favorable than Sabre.

Institutional & Insider Ownership

14.1% of Switch shares are owned by institutional investors. 12.6% of Switch shares are owned by company insiders. Comparatively, 0.7% of Sabre shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Switch pays an annual dividend of $0.06 per share and has a dividend yield of 0.5%. Sabre pays an annual dividend of $0.56 per share and has a dividend yield of 2.2%. Sabre pays out 43.1% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Switch and Sabre’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Switch	$378.27 million	8.29	-$15.20 million	N/A	N/A
Sabre	$3.60 billion	1.98	$242.53 million	$1.30	19.96

Sabre has higher revenue and earnings than Switch.

Summary

Sabre beats Switch on 7 of the 12 factors compared between the two stocks.

Switch Company Profile

Switch, Inc., through its subsidiary, Switch, Ltd., provides colocation space and related services to technology and digital media companies, cloud and managed service providers, financial institutions, and telecommunications providers that conduct critical business on the Internet. The company develops and operates data centers in Nevada, Michigan, and Georgia. Switch, Inc. was founded in 2000 and is headquartered in Las Vegas, Nevada.

Sabre Company Profile

Sabre Corporation, through its subsidiary, Sabre Holdings Corporation, provides technology solutions to the travel and tourism industry worldwide. It operates through two segments, Travel Network, and Airline and Hospitality Solutions. The Travel Network segment operates as a business-to-business travel marketplace that offers travel content, such as inventory, prices, and availability from a range of travel suppliers, including airlines, hotels, car rental brands, rail carriers, cruise lines, and tour operators with a network of travel buyers comprising online and offline travel agencies, travel management companies, and corporate travel departments. The Airline and Hospitality Solutions segment provides a portfolio of software technology products and solutions through software-as-a-service and hosted delivery models to airlines, hoteliers, and other travel suppliers. Its products include SabreSonic Customer Sales & Service, a reservation system that provides capabilities around managing sales and customer service across an airline's diverse touch points; Sabre AirVision Marketing & Planning, a set of airline commercial planning solutions; and Sabre AirCentre Enterprise Operations, a set of solutions for planning and management of airline, airport, and customer operations. This segment also provides software and solutions to hoteliers through SynXis, a central reservation system; SynXis Property Manager Solution for property management; and marketing, professional, and revenue management services. Sabre Corporation was founded in 2006 and is headquartered in Southlake, Texas.