Head-To-Head Analysis: CDK Global (CDK) vs. The Competition
CDK Global (NASDAQ: CDK) is one of 103 public companies in the “Enterprise Software” industry, but how does it weigh in compared to its peers? We will compare CDK Global to related companies based on the strength of its risk, profitability, earnings, dividends, analyst recommendations, valuation and institutional ownership.
Volatility & Risk
CDK Global has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500. Comparatively, CDK Global’s peers have a beta of 1.05, meaning that their average share price is 5% more volatile than the S&P 500.
Institutional and Insider Ownership
86.7% of CDK Global shares are held by institutional investors. Comparatively, 62.3% of shares of all “Enterprise Software” companies are held by institutional investors. 0.4% of CDK Global shares are held by company insiders. Comparatively, 22.2% of shares of all “Enterprise Software” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This table compares CDK Global and its peers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|CDK Global Competitors||-22.32%||-213.14%||-7.22%|
CDK Global pays an annual dividend of $0.56 per share and has a dividend yield of 0.8%. CDK Global pays out 27.2% of its earnings in the form of a dividend. As a group, “Enterprise Software” companies pay a dividend yield of 0.7% and pay out 31.2% of their earnings in the form of a dividend. CDK Global is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.
This is a breakdown of recent ratings and target prices for CDK Global and its peers, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|CDK Global Competitors||371||2207||4139||119||2.59|
CDK Global presently has a consensus target price of $73.00, indicating a potential upside of 5.66%. As a group, “Enterprise Software” companies have a potential upside of 2.09%. Given CDK Global’s stronger consensus rating and higher probable upside, equities research analysts plainly believe CDK Global is more favorable than its peers.
Valuation and Earnings
This table compares CDK Global and its peers gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Net Income||Price/Earnings Ratio|
|CDK Global||$2.22 billion||$295.60 million||33.54|
|CDK Global Competitors||$1.76 billion||$288.64 million||4.38|
CDK Global has higher revenue and earnings than its peers. CDK Global 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.
CDK Global beats its peers on 12 of the 15 factors compared.
About CDK Global
CDK Global, Inc. provides integrated information technology and digital marketing solutions. The Company’s segments include Retail Solutions North America, Advertising North America and CDK International. Through its Retail Solutions North America segment, the Company provides technology-based solutions, including automotive Website platforms, that help automotive retailers, original equipment manufacturers (OEMs) and other industry participants manage the acquisition, sale, financing, insuring, parts supply, repair and maintenance of vehicles. Through its Advertising North America segment, the Company provides advertising solutions, including management of digital advertising spend, for OEMs and automotive retailers. As of June 30, 2016, through its CDK International segment, it provided technology-based solutions similar to the retail solutions provided in its Retail Solutions North America segment in approximately 100 countries outside of the United States and Canada.
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