Head to Head Survey: SecureWorks (NASDAQ:SCWX) and Block (NYSE:XYZ)

SecureWorks (NASDAQ:SCWX) and Block (NYSE:XYZ) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and price targets for SecureWorks and Block, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SecureWorks	1	1	0	0	1.50
Block	0	5	25	0	2.83

SecureWorks presently has a consensus price target of $7.00, indicating a potential downside of 17.74%. Block has a consensus price target of $96.31, indicating a potential upside of 57.73%. Given Block’s stronger consensus rating and higher probable upside, analysts clearly believe Block is more favorable than SecureWorks.

Insider & Institutional Ownership

14.4% of SecureWorks shares are owned by institutional investors. Comparatively, 70.4% of Block shares are owned by institutional investors. 81.5% of SecureWorks shares are owned by insiders. Comparatively, 10.5% of Block shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares SecureWorks and Block’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SecureWorks	-25.49%	-5.71%	-3.93%
Block	11.92%	5.80%	3.08%

Earnings and Valuation

This table compares SecureWorks and Block”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SecureWorks	$365.88 million	2.07	-$86.04 million	($0.99)	-8.60
Block	$24.12 billion	1.57	$9.77 million	$4.55	13.42

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

Risk & Volatility

SecureWorks has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500. Comparatively, Block has a beta of 2.78, indicating that its share price is 178% more volatile than the S&P 500.

Summary

Block beats SecureWorks on 12 of the 14 factors compared between the two stocks.

About SecureWorks

SecureWorks Corp., through its subsidiaries, provides technology-driven information security solutions for protecting its customers in the United States and internationally. The company's solutions include software-as-a-service solutions; managed security services; and professional services, including incident response and penetration testing services. Its solutions enable organizations to prevent security breaches, detect malicious activity, respond rapidly to security breaches, and identify emerging threats. The company sells its solutions primarily through its referral agents, regional value-added resellers, trade associations, and managed security service providers. It serves customers in a range of industries, including financial services, manufacturing, technology, retail, insurance, utility, and healthcare sectors. The company was formerly known as SecureWorks Holding Corporation and changed its name to SecureWorks Corp. in November 2015. SecureWorks Corp. was founded in 1999 and is headquartered in Atlanta, Georgia. SecureWorks Corp. is a subsidiary of Dell Marketing L.P.

About Block

Square, Inc. provides payment and point-of-sale solutions in the United States and internationally. The company's commerce ecosystem includes point-of-sale software and hardware that enables sellers to turn mobile and computing devices into payment and point-of-sale solutions. It offers hardware products, including Magstripe reader, which enables swiped transactions of magnetic stripe cards; Contactless and chip reader that accepts EMV® chip cards and Near Field Communication payments; Chip card reader, which accepts EMV® chip cards and enables swiped transactions of magnetic stripe cards; Square Stand, which enables an iPad to be used as a payment terminal or full point of sale solution; and Square Register that combines its hardware, point-of-sale software, and payments technology, as well as managed payments solutions. The company also provides Square Point of Sale software; Cash App, which provides access to the financial system, allowing customers to electronically send, store, and spend money; Caviar, a food ordering platform for restaurants to offer food ordering, pickup and delivery, to their customers; and Square Capital that facilitates loans to sellers based on real-time payment and point-of-sale data. Square, Inc. was founded in 2009 and is headquartered in San Francisco, California.