Analyzing Rentokil Initial (NYSE:RTO) & Concentrix (NASDAQ:CNXC)

Concentrix (NASDAQ:CNXC) and Rentokil Initial (NYSE:RTO) are both business services companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, earnings, institutional ownership and dividends.

Dividends

Concentrix pays an annual dividend of $1.44 per share and has a dividend yield of 6.1%. Rentokil Initial pays an annual dividend of $0.72 per share and has a dividend yield of 2.4%. Concentrix pays out -6.8% of its earnings in the form of a dividend. Concentrix has increased its dividend for 3 consecutive years. Concentrix is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Concentrix and Rentokil Initial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Concentrix	-13.16%	19.82%	5.62%
Rentokil Initial	N/A	N/A	N/A

Institutional and Insider Ownership

90.3% of Concentrix shares are owned by institutional investors. Comparatively, 9.9% of Rentokil Initial shares are owned by institutional investors. 0.9% of Concentrix shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Concentrix and Rentokil Initial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Concentrix	$10.00 billion	0.14	-$1.28 billion	($21.32)	-1.11
Rentokil Initial	$6.91 billion	2.20	$470.00 million	N/A	N/A

Rentokil Initial has lower revenue, but higher earnings than Concentrix.

Volatility & Risk

Concentrix has a beta of 0.47, suggesting that its stock price is 53% less volatile than the S&P 500. Comparatively, Rentokil Initial has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Concentrix and Rentokil Initial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Concentrix	1	1	3	0	2.40
Rentokil Initial	2	3	6	1	2.50

Concentrix presently has a consensus price target of $32.75, suggesting a potential upside of 38.77%. Rentokil Initial has a consensus price target of $34.50, suggesting a potential upside of 14.94%. Given Concentrix’s higher possible upside, equities research analysts clearly believe Concentrix is more favorable than Rentokil Initial.

Summary

Concentrix beats Rentokil Initial on 9 of the 16 factors compared between the two stocks.

About Concentrix

Concentrix Corporation engages in the provision of technology-infused customer experience (CX) solutions worldwide. The company provides CX process optimization, technology innovation, front- and back-office automation, analytics, and business transformation services, across various channels of communication, such as voice, chat, email, social media, asynchronous messaging, and custom applications. It also offers customer lifecycle management; customer experience/user experience strategy and design; analytics and actionable insights; digital transformation services that design and engineer CX solutions to enable efficient customer self-service and build customer loyalty; customer engagement solutions and services that address the entirety of the customer lifecycle; AI technology that can intelligently act on customer intent to improve customer experience with non-human engagement; voice of the customer and analytics solutions to gather and analyze customer feedback to foster loyalty to, and growth with, clients; analytics and consulting solutions that synthesize data and provide professional insight to improve clients’ customer experience strategies; vertical business process outsourcing (BPO) services; and back office BPO services that support clients in non-customer facing areas. The company’s clients include technology and consumer electronics, retail, travel and e-commerce, communications and media, banking, financial services and insurance, healthcare, and others, as well as global IPOs, social brands, and banks. Concentrix Corporation was founded in 2004 and is based in Newark, California.

About Rentokil Initial

Rentokil Initial plc, together with its subsidiaries, provides route-based services in North America, the United Kingdom, rest of Europe, Asia, the Pacific, and internationally. It offers a range of pest control services for rodents, and flying and crawling insects, as well as other forms of wildlife management for commercial customers. The company provides hygiene services, including the provision and maintenance of products, such as soap and hand sanitizer dispensers, hand dryers, air care and purification, cubicle and surface sanitizers, feminine hygiene units, toilet paper dispensers, and floor protection mats. In addition, it engages in the supply and maintenance of workwear and protective equipment. Further, the company offers property care services; and provides a range of specialist cleaning services, such as graffiti removal deep cleaning of kitchens and washrooms, trauma cleaning, and flood or fire damage cleaning, as well as specialist medical and hygiene services. Rentokil Initial plc was founded in 1903 and is headquartered in Crawley, the United Kingdom.