Reviewing Cognizant Technology Solutions (CTSH) & Its Rivals

Cognizant Technology Solutions (NASDAQ:CTSH) is one of 271 publicly-traded companies in the “IT Services” industry, but how does it weigh in compared to its rivals? We will compare Cognizant Technology Solutions to related businesses based on the strength of its dividends, valuation, institutional ownership, analyst recommendations, earnings, risk and profitability.

Earnings and Valuation

This table compares Cognizant Technology Solutions and its rivals top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Cognizant Technology Solutions	$21.89 billion	$2.23 billion	11.81
Cognizant Technology Solutions Competitors	$3.32 billion	$227.06 million	-23.54

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

Institutional and Insider Ownership

92.4% of Cognizant Technology Solutions shares are owned by institutional investors. Comparatively, 36.4% of shares of all “IT Services” companies are owned by institutional investors. 0.4% of Cognizant Technology Solutions shares are owned by company insiders. Comparatively, 20.4% of shares of all “IT Services” companies are owned 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.

Dividends

Cognizant Technology Solutions pays an annual dividend of $1.32 per share and has a dividend yield of 2.0%. Cognizant Technology Solutions pays out 24.1% 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 71.0% of their earnings in the form of a dividend. Cognizant Technology Solutions has increased its dividend for 6 consecutive years.

Analyst Recommendations

This is a summary of current ratings and target prices for Cognizant Technology Solutions and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cognizant Technology Solutions	0	14	10	0	2.42
Cognizant Technology Solutions Competitors	1992	5653	9473	342	2.47

Cognizant Technology Solutions presently has a consensus price target of $68.17, indicating a potential upside of 5.33%. As a group, “IT Services” companies have a potential upside of 30.67%. Given Cognizant Technology Solutions’ rivals stronger consensus rating and higher possible upside, analysts clearly believe Cognizant Technology Solutions has less favorable growth aspects than its rivals.

Risk and Volatility

Cognizant Technology Solutions has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500. Comparatively, Cognizant Technology Solutions’ rivals have a beta of 2.16, meaning that their average stock price is 116% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cognizant Technology Solutions	11.75%	17.72%	12.60%
Cognizant Technology Solutions Competitors	-189.78%	-32.45%	-8.29%

Summary

Cognizant Technology Solutions beats its rivals on 8 of the 15 factors compared.

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.