Head to Head Comparison: Meta Platforms (NASDAQ:META) and System1 (NYSE:SST)

Meta Platforms (NASDAQ:META) and System1 (NYSE:SST) are both computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Meta Platforms and System1, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Meta Platforms	2	3	35	2	2.88
System1	0	1	0	0	2.00

Meta Platforms presently has a consensus price target of $621.63, suggesting a potential upside of 8.44%. System1 has a consensus price target of $2.00, suggesting a potential upside of 90.48%. Given System1’s higher possible upside, analysts clearly believe System1 is more favorable than Meta Platforms.

Volatility & Risk

Meta Platforms has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500. Comparatively, System1 has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500.

Valuation & Earnings

This table compares Meta Platforms and System1″s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Meta Platforms	$134.90 billion	10.75	$39.10 billion	$19.59	29.26
System1	$363.44 million	0.26	-$227.22 million	($2.27)	-0.46

Meta Platforms has higher revenue and earnings than System1. System1 is trading at a lower price-to-earnings ratio than Meta Platforms, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

79.9% of Meta Platforms shares are owned by institutional investors. Comparatively, 87.5% of System1 shares are owned by institutional investors. 13.7% of Meta Platforms shares are owned by insiders. Comparatively, 28.3% of System1 shares are owned by 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.

Profitability

This table compares Meta Platforms and System1’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Meta Platforms	34.34%	34.16%	22.89%
System1	-53.92%	-53.12%	-14.48%

Dividends

Meta Platforms pays an annual dividend of $2.00 per share and has a dividend yield of 0.3%. System1 pays an annual dividend of $0.32 per share and has a dividend yield of 30.4%. Meta Platforms pays out 10.2% of its earnings in the form of a dividend. System1 pays out -14.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. System1 is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Meta Platforms beats System1 on 11 of the 17 factors compared between the two stocks.

About Meta Platforms

Meta Platforms, Inc. engages in the development of products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and wearables worldwide. It operates in two segments, Family of Apps and Reality Labs. The Family of Apps segment offers Facebook, which enables people to share, discuss, discover, and connect with interests; Instagram, a community for sharing photos, videos, and private messages, as well as feed, stories, reels, video, live, and shops; Messenger, a messaging application for people to connect with friends, family, communities, and businesses across platforms and devices through text, audio, and video calls; and WhatsApp, a messaging application that is used by people and businesses to communicate and transact privately. The Reality Labs segment provides augmented and virtual reality related products comprising consumer hardware, software, and content that help people feel connected, anytime, and anywhere. The company was formerly known as Facebook, Inc. and changed its name to Meta Platforms, Inc. in October 2021. The company was incorporated in 2004 and is headquartered in Menlo Park, California

About System1

System1, Inc. provides omnichannel customer acquisition platform services through its proprietary responsive acquisition marketing platform in the United States, the United Kingdom, Canada, the Netherlands, and internationally. It operates through two segments: Owned and Operated Advertising, and Partner Network. The company engages in the provision of acquiring traffic to its owned and operated websites, as well as revenue-sharing arrangements and related services. It also operates MapQuest, a web-based navigation service that delivers turn-by-turn direction services to users; Info.com, a metasearch engine that consumers can use to search for relevant information; HowStuffWorks, a commercial website focused on helping people solve problems in their daily lives by using various types of digital media to easily breakdown and explain complex concepts, topics, terminology and mechanisms; Startpage, a private search engine that allows users to browse and search the Internet in complete privacy; and CouponFollow for coupon destinations for online shoppers, as well as ActiveBeat and Infospace. In addition, the company provides antivirus software solutions, which offers customers a single packaged solution that provides protection and reporting to the end users. The company is based in Los Angeles, California.