Critical Analysis: Wipro (WIT) vs. Its Competitors

Wipro (NYSE:WIT) is one of 271 public companies in the “IT Services” industry, but how does it weigh in compared to its peers? We will compare Wipro to related companies based on the strength of its risk, institutional ownership, analyst recommendations, dividends, earnings, profitability and valuation.

Dividends

Wipro pays an annual dividend of $0.04 per share and has a dividend yield of 1.8%. Wipro pays out 30.8% of its earnings in the form of a dividend. As a group, “IT Services” companies pay a dividend yield of 2.3% and pay out 71.1% of their earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Wipro and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wipro	4	0	0	0	1.00
Wipro Competitors	2002	5664	9487	342	2.47

Wipro presently has a consensus target price of $1.70, suggesting a potential downside of 21.48%. As a group, “IT Services” companies have a potential upside of 25.63%. Given Wipro’s peers stronger consensus rating and higher probable upside, analysts clearly believe Wipro has less favorable growth aspects than its peers.

Profitability

This table compares Wipro and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wipro	13.58%	15.64%	9.55%
Wipro Competitors	-189.78%	-32.50%	-8.33%

Volatility and Risk

Wipro has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500. Comparatively, Wipro’s peers have a beta of 2.16, suggesting that their average share price is 116% more volatile than the S&P 500.

Earnings & Valuation

This table compares Wipro and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Wipro	$9.87 billion	$1.41 billion	16.65
Wipro Competitors	$3.34 billion	$227.06 million	-24.90

Wipro has higher revenue and earnings than its peers. Wipro is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Insider & Institutional Ownership

2.4% of Wipro shares are held by institutional investors. Comparatively, 36.4% of shares of all “IT Services” companies are held by institutional investors. 1.0% of Wipro shares are held by company insiders. Comparatively, 20.4% of shares of all “IT Services” companies are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Wipro peers beat Wipro on 8 of the 15 factors compared.

About Wipro

Wipro Limited is an India-based technology services and consulting company headquartered in Bengaluru. Founded in 1945 as a business selling vegetable oils, it later expanded into technology and became an international provider of IT services. The company helps businesses design, build and manage technology systems. Its services include digital and business transformation, cloud computing, cybersecurity, data and analytics, software development, engineering, and IT infrastructure and business process services.