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 businesses based on the strength of its analyst recommendations, profitability, dividends, risk, institutional ownership, earnings and valuation.

Analyst Ratings

This is a breakdown of current recommendations and price targets for CDK Global and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CDK Global 0 1 3 0 2.75
CDK Global Competitors 373 2207 4141 119 2.59

CDK Global presently has a consensus target price of $73.00, indicating a potential upside of 6.17%. As a group, “Enterprise Software” companies have a potential upside of 2.86%. Given CDK Global’s stronger consensus rating and higher possible upside, research analysts plainly believe CDK Global is more favorable than its peers.

Volatility & Risk

CDK Global has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500. Comparatively, CDK Global’s peers have a beta of 1.05, indicating that their average share price is 5% more volatile than the S&P 500.

Earnings and Valuation

This table compares CDK Global and its peers revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
CDK Global $2.22 billion $295.60 million 33.38
CDK Global Competitors $1.76 billion $288.64 million 16.01

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.

Profitability

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 13.42% 515.77% 13.57%
CDK Global Competitors -22.32% -213.11% -7.18%

Dividends

CDK Global pays an annual dividend of $0.60 per share and has a dividend yield of 0.9%. CDK Global pays out 29.1% 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 31.9% 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.

Institutional and Insider Ownership

86.7% of CDK Global shares are owned by institutional investors. Comparatively, 61.5% of shares of all “Enterprise Software” companies are owned by institutional investors. 0.4% of CDK Global shares are owned by company insiders. Comparatively, 23.2% of shares of all “Enterprise Software” companies are owned 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.

Summary

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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