Cognizant Technology Solutions (NASDAQ:CTSH) vs. Genpact (NYSE:G) Financial Comparison

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

Analyst Ratings

This is a summary of current recommendations and price targets for Genpact and Cognizant Technology Solutions, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Genpact	0	6	3	0	2.33
Cognizant Technology Solutions	0	12	6	0	2.33

Genpact presently has a consensus price target of $51.13, suggesting a potential upside of 14.77%. Cognizant Technology Solutions has a consensus price target of $85.19, suggesting a potential upside of 16.38%. Given Cognizant Technology Solutions’ higher probable upside, analysts clearly believe Cognizant Technology Solutions is more favorable than Genpact.

Earnings & Valuation

This table compares Genpact and Cognizant Technology Solutions”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	1.63	$513.67 million	$3.01	14.80
Cognizant Technology Solutions	$20.86 billion	1.71	$2.24 billion	$4.31	16.98

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

Dividends

Genpact pays an annual dividend of $0.68 per share and has a dividend yield of 1.5%. Cognizant Technology Solutions pays an annual dividend of $1.24 per share and has a dividend yield of 1.7%. Genpact pays out 22.6% of its earnings in the form of a dividend. Cognizant Technology Solutions pays out 28.8% 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 Cognizant Technology Solutions has raised its dividend for 6 consecutive years.

Insider & Institutional Ownership

96.0% of Genpact shares are held by institutional investors. Comparatively, 92.4% of Cognizant Technology Solutions shares are held by institutional investors. 3.1% of Genpact shares are held by company insiders. Comparatively, 0.3% of Cognizant Technology Solutions shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

Genpact has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500. Comparatively, Cognizant Technology Solutions has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500.

Profitability

This table compares Genpact and Cognizant Technology Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Genpact	11.01%	22.71%	11.11%
Cognizant Technology Solutions	10.20%	17.00%	12.61%

Summary

Cognizant Technology Solutions beats Genpact on 10 of the 15 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 Cognizant Technology Solutions

Cognizant Technology Solutions Corporation, a professional services company, provides consulting and technology, and outsourcing services in North America, Europe, and internationally. It operates through four segments: Financial Services, Health Sciences, Products and Resources, and Communications, Media and Technology. The company provides customer experience, robotic process automation, analytics, and AI services in areas, such as digital lending, fraud detection, and next generation payments; the shift towards consumerism, outcome-based contracting, digital health, delivering integrated seamless, omni-channel, and patient-centered experience; and services that drive operational improvements in areas, such as clinical development, pharmacovigilance, and manufacturing, as well as claims processing, enrollment, membership, and billing to healthcare providers and payers, and life sciences companies, including pharmaceutical, biotech, and medical device companies. It offers solution to manufacturers, automakers, retailers and travel and hospitality companies, as well as companies providing logistics, energy and utility services; and digital content, business process improvement, technology modernization, and the creation of unified and compelling user experience services to communications, media and entertainment, education, and information services and technology companies. The company was incorporated in 1988 and is headquartered in Teaneck, New Jersey.