Financial Review: BLUCORA INC Common Stock (BCOR) and Ally Financial (ALLY)

BLUCORA INC Common Stock (NASDAQ: BCOR) and Ally Financial (NYSE:ALLY) are both business services companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, earnings, valuation, dividends and profitability.

Insider & Institutional Ownership

94.5% of BLUCORA INC Common Stock shares are owned by institutional investors. Comparatively, 98.0% of Ally Financial shares are owned by institutional investors. 2.9% of BLUCORA INC Common Stock shares are owned by insiders. Comparatively, 0.2% of Ally Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Ally Financial pays an annual dividend of $0.52 per share and has a dividend yield of 2.0%. BLUCORA INC Common Stock does not pay a dividend. Ally Financial pays out 21.8% of its earnings in the form of a dividend.

Risk & Volatility

BLUCORA INC Common Stock has a beta of -0.05, suggesting that its share price is 105% less volatile than the S&P 500. Comparatively, Ally Financial has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500.

Profitability

This table compares BLUCORA INC Common Stock and Ally Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BLUCORA INC Common Stock 7.84% 13.11% 7.13%
Ally Financial 14.20% 8.71% 0.70%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for BLUCORA INC Common Stock and Ally Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BLUCORA INC Common Stock 0 1 4 0 2.80
Ally Financial 0 6 13 0 2.68

BLUCORA INC Common Stock presently has a consensus target price of $36.31, indicating a potential downside of 4.08%. Ally Financial has a consensus target price of $32.28, indicating a potential upside of 25.84%. Given Ally Financial’s higher probable upside, analysts plainly believe Ally Financial is more favorable than BLUCORA INC Common Stock.

Valuation and Earnings

This table compares BLUCORA INC Common Stock and Ally Financial’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BLUCORA INC Common Stock $509.56 million 3.49 $27.03 million $1.22 31.02
Ally Financial $9.87 billion 1.12 $929.00 million $2.39 10.73

Ally Financial has higher revenue and earnings than BLUCORA INC Common Stock. Ally Financial is trading at a lower price-to-earnings ratio than BLUCORA INC Common Stock, indicating that it is currently the more affordable of the two stocks.

Summary

Ally Financial beats BLUCORA INC Common Stock on 9 of the 16 factors compared between the two stocks.

BLUCORA INC Common Stock Company Profile

Blucora, Inc. provides technology-enabled financial solutions to consumers, small business owners, and tax professionals in the United States. The company operates through two segments, Wealth Management and Tax Preparation. The Wealth Management segment offers an integrated platform of brokerage, investment advisory, and insurance services to financial advisors. The Tax Preparation segment provides digital do-it-yourself tax preparation solutions for consumers and small business owners through TaxAct.com; and ancillary services, including refund payment transfer, audit defense, stored value cards, retirement investment accounts, tax preparation support services, data archive services, and e-filing services. This segment also offers professional tax preparer software. The company was formerly known as InfoSpace, Inc. and changed its name to Blucora, Inc. in June 2012. Blucora, Inc. was founded in 1996 and is headquartered in Irving, Texas.

Ally Financial Company Profile

Ally Financial Inc. provides various financial products and services for consumers, businesses, automotive dealers, and corporate clients in the United States and Canada. The company operates Automotive Finance Operations, Insurance Operations, Mortgage Finance Operations, and Corporate Finance Operations segments. The Automotive Finance Operations segment provides automotive financing services to consumers and automotive dealers. Its automotive finance services include providing retail installment sales contracts, loans and leases, term loans to dealers, financing dealer floorplans, other lines of credit to dealers, warehouse lines to companies, and fleet financing. This segment also offers financing services to companies and municipalities for the purchase or lease of vehicles and equipment, and vehicle remarketing services. The Insurance Operations segment offers consumer finance protection and insurance products through the automotive dealer channel, and commercial insurance products directly to dealers. The Mortgage Finance Operations segment manages held-for-investment consumer mortgage finance loan portfolio that includes bulk purchases of high-quality jumbo and LMI mortgage loans originated by third parties, as well as direct-to-consumer mortgage offerings. The Corporate Finance Operations segment provides senior secured leveraged cash flow and asset-based loans to middle market companies. Its primary focus is on businesses owned by private equity sponsors with loans used for leveraged buyouts, mergers and acquisitions, debt refinancing, restructurings, and working capital. The company, through its subsidiary, Ally Bank, also offers commercial banking products and services. In addition, it provides digital wealth management and online brokerage platform services. The company was formerly known as GMAC Inc. and changed its name to Ally Financial Inc. in May 2010. Ally Financial Inc. was founded in 1919 and is headquartered in Detroit, Michigan.

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