Accenture (ACN) and Its Rivals Critical Review

Accenture (NYSE:ACN) is one of 271 publicly-traded companies in the “IT Services” industry, but how does it compare to its peers? We will compare Accenture to similar businesses based on the strength of its dividends, institutional ownership, valuation, analyst recommendations, profitability, risk and earnings.

Insider and Institutional Ownership

75.1% of Accenture shares are owned by institutional investors. Comparatively, 36.7% of shares of all “IT Services” companies are owned by institutional investors. 0.0% of Accenture shares are owned by insiders. Comparatively, 20.4% of shares of all “IT Services” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

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

	Gross Revenue	Net Income	Price/Earnings Ratio
Accenture	$74.18 billion	$8.37 billion	19.20
Accenture Competitors	$8.86 billion	$227.67 million	-23.86

Accenture has higher revenue and earnings than its peers. Accenture 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.

Risk & Volatility

Accenture has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500. Comparatively, Accenture’s peers have a beta of 2.15, meaning that their average stock price is 115% more volatile than the S&P 500.

Dividends

Accenture pays an annual dividend of $6.84 per share and has a dividend yield of 2.6%. Accenture pays out 50.4% of its earnings in the form of a dividend. As a group, “IT Services” companies pay a dividend yield of 2.4% and pay out 70.9% of their earnings in the form of a dividend. Accenture has increased its dividend for 20 consecutive years. Accenture is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Accenture	11.28%	26.53%	12.58%
Accenture Competitors	-191.32%	-32.18%	-8.63%

Analyst Ratings

This is a summary of recent recommendations and price targets for Accenture and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Accenture	0	17	10	0	2.37
Accenture Competitors	1991	5651	9469	342	2.47

Accenture currently has a consensus price target of $221.07, suggesting a potential downside of 15.09%. As a group, “IT Services” companies have a potential upside of 31.67%. Given Accenture’s peers stronger consensus rating and higher probable upside, analysts plainly believe Accenture has less favorable growth aspects than its peers.

Summary

Accenture beats its peers on 9 of the 15 factors compared.

About Accenture

Accenture plc, a professional services company, provides strategy and consulting, industry X, song, and technology and operation services worldwide. The company offers application services, including agile transformation, DevOps, application modernization, enterprise architecture, software and quality engineering, data management; intelligent automation comprising robotic process automation, natural language processing, and virtual agents; and application management services, as well as software engineering services; strategy and consulting services; data and analytics strategy, data discovery and augmentation, data management and beyond, data democratization, and industrialized solutions comprising turnkey analytics and artificial intelligence (AI) solutions; metaverse; and sustainability services. It also provides change management, HR transformation and delivery, organization strategy and design, talent strategy and development, and leadership and culture services; digital commerce; infrastructure services, including cloud infrastructure managed, cloud and data center, network, digital workplace, database platforms, service management, and cloud and infrastructure security services; data-enabled operating models; technology consulting and AI services; and technology consulting services. In addition, the company offers engineering and R&D digitization, smart connected products, product as-a-service enablement, capital projects, intelligent asset management, digital industrial workforce, and autonomous robotic systems; business process outsourcing; and services related to technology innovation. Further, it provides cloud, ecosystem, marketing, security, supply chain management, zero-based transformation, customer experience, finance consulting, mergers and acquisitions, and sustainability services. The company has a collaboration with Salesforce, Inc. to develop Salesforce Life Sciences Cloud. The company was founded in 1951 and is based in Dublin, Ireland.