TeleTech Holdings (NASDAQ: TTEC) and VeriSign (NASDAQ:VRSN) are both business services companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, analyst recommendations, risk and institutional ownership.

Insider & Institutional Ownership

25.7% of TeleTech Holdings shares are held by institutional investors. 70.0% of TeleTech Holdings shares are held by company insiders. Comparatively, 0.9% of VeriSign shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

TeleTech Holdings pays an annual dividend of $0.44 per share and has a dividend yield of 1.1%. VeriSign does not pay a dividend. TeleTech Holdings pays out 45.4% of its earnings in the form of a dividend.

Volatility & Risk

TeleTech Holdings has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500. Comparatively, VeriSign has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500.

Profitability

This table compares TeleTech Holdings and VeriSign’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TeleTech Holdings 3.30% 19.49% 8.70%
VeriSign 39.92% -36.99% 18.95%

Valuation & Earnings

This table compares TeleTech Holdings and VeriSign’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TeleTech Holdings $1.35 billion 1.33 $171.35 million $0.97 40.26
VeriSign $1.15 billion 8.91 $747.69 million $3.67 27.93

VeriSign has higher revenue, but lower earnings than TeleTech Holdings. VeriSign is trading at a lower price-to-earnings ratio than TeleTech Holdings, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for TeleTech Holdings and VeriSign, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TeleTech Holdings 0 0 0 0 N/A
VeriSign 0 3 0 0 2.00

VeriSign has a consensus price target of $83.00, suggesting a potential downside of 19.04%. Given VeriSign’s higher probable upside, analysts clearly believe VeriSign is more favorable than TeleTech Holdings.

Summary

VeriSign beats TeleTech Holdings on 9 of the 14 factors compared between the two stocks.

TeleTech Holdings Company Profile

TeleTech Holdings, Inc. (TeleTech) is a customer service provider that delivers consulting, technology, growth and customer care solutions on a global scale. The Company operates through four segments: Customer Management Services (CMS), Customer Growth Services (CGS), Customer Technology Services (CTS) and Customer Strategy Services (CSS). The CMS segment designs and manages clients’ front-to-back office processes to deliver just-in-time, personalized, multi-channel interactions. The CGS segment offers integrated sales and marketing solutions to help its clients in the business-to-consumer or business-to-business markets. The CTS segment includes operational and system design consulting, customer experience technology product, implementation and integration consulting services, and management of clients cloud and on premise solutions. The CSS segment provides professional services in customer experience strategy, and system and operational process optimization.

VeriSign Company Profile

VeriSign, Inc. is a provider of domain name registry services and Internet security. The Company operates through Registry Services and Security Services segment. Registry Services ensure the security, stability and resiliency of Internet infrastructure and services, including the .com and .net domains, and operation of the root-zone maintainer functions for the core of the Internet’s Domain Name System (DNS). Security Services provides infrastructure assurance services consisting of Distributed Denial of Services (DDoS) Protection Services and Managed DNS Services. DDoS Protection Services supports online business continuity by providing monitoring and mitigation services against DDoS attacks. Managed DNS Services is a hosting service that delivers DNS resolution for the availability of Web-based systems.

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