Head to Head Contrast: Genpact (NYSE:G) vs. Amdocs (NASDAQ:DOX)

Genpact (NYSE:G) and Amdocs (NASDAQ:DOX) are both mid-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, profitability and risk.

Risk and Volatility

Genpact has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500. Comparatively, Amdocs has a beta of 0.43, meaning that its stock price is 57% less volatile than the S&P 500.

Profitability

This table compares Genpact and Amdocs’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Genpact	11.01%	22.55%	10.94%
Amdocs	12.46%	19.78%	11.06%

Insider and Institutional Ownership

96.0% of Genpact shares are owned by institutional investors. Comparatively, 92.0% of Amdocs shares are owned by institutional investors. 2.8% of Genpact shares are owned by company insiders. Comparatively, 15.4% of Amdocs shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Genpact	$4.77 billion	1.73	$513.67 million	$3.10	15.40
Amdocs	$4.53 billion	1.98	$564.70 million	$5.05	15.71

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

Analyst Recommendations

This is a breakdown of recent ratings for Genpact and Amdocs, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Genpact	0	7	3	0	2.30
Amdocs	0	2	2	0	2.50

Genpact presently has a consensus target price of $51.00, indicating a potential upside of 6.80%. Amdocs has a consensus target price of $97.00, indicating a potential upside of 22.24%. Given Amdocs’ stronger consensus rating and higher possible upside, analysts plainly believe Amdocs is more favorable than Genpact.

Dividends

Genpact pays an annual dividend of $0.68 per share and has a dividend yield of 1.4%. Amdocs pays an annual dividend of $2.11 per share and has a dividend yield of 2.7%. Genpact pays out 21.9% of its earnings in the form of a dividend. Amdocs pays out 41.8% 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. Genpact has raised its dividend for 6 consecutive years and Amdocs has raised its dividend for 14 consecutive years. Amdocs is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Amdocs beats Genpact on 11 of the 17 factors compared between the two stocks.

About Genpact

Genpact Limited provides business process outsourcing and information technology services in India, rest of Asia, North and Latin America, and Europe. It operates through three segments: Financial services; Consumer and Healthcare; and High Tech and Manufacturing. The Financial Services segment offers retail customer onboarding, customer service, collections, card servicing operations, loan and payment operations, commercial loan, equipment and auto loan, mortgage origination, compliance services, reporting and monitoring, and wealth management operations support; financial crime and risk management services; and underwriting support, new business processing, policy administration, claims management, catastrophe modeling and actuarial services, as well as property and casualty claims. The Consumer and Healthcare segment provides demand generation, sensing and planning, supply chain planning and management, pricing and trade promotion management, deduction recovery management, order management, and digital commerce; and end-to-end claim lifecycle management, from claims processing and adjudication to claims recovery and payment integrity, revenue cycle management, health equity analytics, and care services. The High Tech and Manufacturing segment offers industry-specific solutions for trust and safety, advertising sales support, customer and user experience, and customer care support; and direct and indirect procurement, logistics, field, aftermarket support, and engineering services. It also provides digital operation services; data-tech-Al services; finance and accounting services, such as accounts payable, invoice-to-cash, record to report, financial planning and analysis, and enterprise risk and compliance; CFO advisory services; supply chain, and sourcing and procurement services; sales and commercial, and marketing and experience services; and environmental, social and governance services. The company was founded in 1997 and is based in Hamilton, Bermuda.

About Amdocs

Amdocs Limited, through its subsidiaries, provides software and services worldwide. It designs, develops, operates, implements, supports, and markets open and modular cloud portfolio. The company provides CES23, a 5G and cloud-native microservices-based market-leading customer experience suite, that enables service providers to build, deliver, and monetize advanced services; Amdocs Subscription Marketplace, a software-as-a-service-based platform that includes an expansive network of pre-integrated digital services, such as media, gaming, eLearning, sports, and retail to security and business services; the monetization suite for charging, billing, policy, and revenue management; Intelligent networking suite with a set of modular, flexible, and open service lifecycle management capabilities for network automation journeys; amAIz, a telco GenAI framework; Amdocs Digital Brands Suite, a pre-integrated digital business suite; and Amdocs eSIM Cloud for service providers. It also offers AI-powered, cloud-native, and home operating systems; data intelligence solutions and applications; end-to-end application development and maintenance services; and ongoing maintenance services. In addition, the company provides a line of services designed for various stages of a service provider’s lifecycle includes consulting, delivery, quality engineering, operations, systems integration, network services, experience-driven services, data, cloud, and content services; managed services comprising application development, modernization and maintenance, IT and infrastructure services, testing and professional services that are designed to assist customers in the selection, implementation, operation, management, and maintenance of IT systems. It serves to the communications, entertainment, and media industry service providers, as well as mobile virtual network operators. Amdocs Limited was founded in 1988 and is headquartered in Saint Louis, Missouri.