Sykes Enterprises, (NASDAQ: SYKE) and EPIQ Systems (NASDAQ:EPIQ) are both business services companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, dividends, risk, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

85.0% of Sykes Enterprises, shares are owned by institutional investors. Comparatively, 84.9% of EPIQ Systems shares are owned by institutional investors. 2.7% of Sykes Enterprises, shares are owned by company insiders. Comparatively, 10.1% of EPIQ Systems shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Sykes Enterprises, and EPIQ Systems, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sykes Enterprises, 0 1 2 0 2.67
EPIQ Systems 0 0 0 0 N/A

Sykes Enterprises, presently has a consensus target price of $33.67, suggesting a potential upside of 8.57%. Given Sykes Enterprises,’s higher possible upside, equities analysts clearly believe Sykes Enterprises, is more favorable than EPIQ Systems.

Dividends

EPIQ Systems pays an annual dividend of $0.36 per share and has a dividend yield of 2.2%. Sykes Enterprises, does not pay a dividend. EPIQ Systems pays out -81.8% of its earnings in the form of a dividend.

Profitability

This table compares Sykes Enterprises, and EPIQ Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sykes Enterprises, 4.32% 11.33% 6.81%
EPIQ Systems -3.96% -7.36% -2.71%

Valuation and Earnings

This table compares Sykes Enterprises, and EPIQ Systems’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Sykes Enterprises, $1.46 billion 0.91 $62.39 million $1.61 19.26
EPIQ Systems N/A N/A N/A ($0.44) -37.48

Sykes Enterprises, has higher revenue and earnings than EPIQ Systems. EPIQ Systems is trading at a lower price-to-earnings ratio than Sykes Enterprises,, indicating that it is currently the more affordable of the two stocks.

Summary

Sykes Enterprises, beats EPIQ Systems on 8 of the 11 factors compared between the two stocks.

Sykes Enterprises, Company Profile

Sykes Enterprises, Incorporated is engaged in providing outsourced customer contact management solutions and services in the business process outsourcing (BPO) arena on a global basis. The Company has operations in two segments: the Americas, which includes the United States, Canada, Latin America, Australia and the Asia Pacific Rim, and EMEA, which includes Europe, the Middle East and Africa. The Company provides its service to clients from its locations in the United States, Canada, Latin America, Australia, the Asia Pacific Rim, Europe and Africa. It serves a range of clients, including medium-sized businesses and public institutions, which span the communications, financial services, technology/consumer, transportation and leisure, healthcare and other industries. Its Americas and EMEA groups primarily provide customer engagement services. The Company’s outsourced customer contact management services include customer care, technical support and customer acquisition.

EPIQ Systems Company Profile

Epiq Systems, Inc. (Epiq) is a provider of professional services and integrated technology for the legal profession. The Company operates in two segments: the Technology segment (Technology), which provides eDiscovery managed services and technology solutions consisting of consulting, collections and forensics, processing, search and review, production of documents and document review services to companies and law firms, and the Bankruptcy and Settlement Administration segment (Bankruptcy and Settlement Administration), which provides managed services and technology solutions that address the needs of its customers with respect to litigation, claims and project administration, compliance matters, controlled disbursements, corporate restructuring, bankruptcy and class action proceedings. Its solutions and professional services cater to a range of client legal matters, including litigation, investigations, financial transactions and regulatory compliance, among others.

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