Contrasting Concentrix (NASDAQ:CNXC) and Thomson Reuters (NASDAQ:TRI)

Thomson Reuters (NASDAQ:TRI) and Concentrix (NASDAQ:CNXC) are both industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, risk and profitability.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Thomson Reuters and Concentrix, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Thomson Reuters	0	6	10	1	2.71
Concentrix	2	1	3	0	2.17

Thomson Reuters currently has a consensus price target of $131.57, indicating a potential upside of 23.86%. Concentrix has a consensus price target of $32.75, indicating a potential upside of 11.47%. Given Thomson Reuters’ stronger consensus rating and higher probable upside, research analysts clearly believe Thomson Reuters is more favorable than Concentrix.

Valuation and Earnings

This table compares Thomson Reuters and Concentrix”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Thomson Reuters	$7.48 billion	6.19	$1.50 billion	$3.76	28.25
Concentrix	$9.83 billion	0.18	-$1.28 billion	($21.32)	-1.38

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

Profitability

This table compares Thomson Reuters and Concentrix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Thomson Reuters	21.22%	15.82%	10.27%
Concentrix	-13.16%	19.82%	5.62%

Insider & Institutional Ownership

17.3% of Thomson Reuters shares are held by institutional investors. Comparatively, 90.3% of Concentrix shares are held by institutional investors. 0.9% of Concentrix shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Thomson Reuters pays an annual dividend of $2.62 per share and has a dividend yield of 2.5%. Concentrix pays an annual dividend of $1.44 per share and has a dividend yield of 4.9%. Thomson Reuters pays out 69.7% of its earnings in the form of a dividend. Concentrix pays out -6.8% 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. 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.

Volatility and Risk

Thomson Reuters has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500. Comparatively, Concentrix has a beta of 0.45, suggesting that its stock price is 55% less volatile than the S&P 500.

Summary

Thomson Reuters beats Concentrix on 11 of the 18 factors compared between the two stocks.

About Thomson Reuters

Thomson Reuters Corporation provides business information services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates in five segments: Legal Professionals, Corporates, Tax & Accounting Professionals, Reuters News, and Global Print. The Legal Professionals segment offers research and workflow products focusing on legal research and integrated legal workflow solutions that combine content, tools, and analytics to law firms and governments. The Corporates segment provides a suite of content-enabled technology solutions for legal, tax, regulatory, compliance, and IT professionals. The Tax & Accounting Professionals segment offers research and workflow products focusing on tax offerings and automating tax workflows to tax, accounting, and audit professionals in accounting firms. The Reuters News segment provides business, financial, and international news to media organizations, professional, and news consumers through news agency and industry events. The Global Print segment offers legal and tax information primarily in print format to legal and tax professionals, governments, law schools, and corporations. The company was formerly known as The Thomson Corporation and changed its name to Thomson Reuters Corporation in April 2008. The company was founded in 1851 and is headquartered in Toronto, Canada. Thomson Reuters Corporation is a subsidiary of The Woodbridge Company Limited.

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.