Analyzing Vertiv (NYSE:VRT) and Genpact (NYSE:G)

Genpact (NYSE:G) and Vertiv (NYSE:VRT) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, earnings, valuation and dividends.

Profitability

This table compares Genpact and Vertiv’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Genpact	11.01%	22.55%	10.94%
Vertiv	10.67%	50.82%	14.98%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Genpact and Vertiv, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Genpact	0	7	2	0	2.22
Vertiv	1	4	19	1	2.80

Genpact presently has a consensus target price of $50.50, suggesting a potential upside of 10.22%. Vertiv has a consensus target price of $187.89, suggesting a potential upside of 2.92%. Given Genpact’s higher possible upside, equities research analysts clearly believe Genpact is more favorable than Vertiv.

Risk & Volatility

Genpact has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500. Comparatively, Vertiv has a beta of 2.06, indicating that its share price is 106% more volatile than the S&P 500.

Institutional & Insider Ownership

96.0% of Genpact shares are owned by institutional investors. Comparatively, 89.9% of Vertiv shares are owned by institutional investors. 3.1% of Genpact shares are owned by insiders. Comparatively, 2.6% of Vertiv shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Genpact pays an annual dividend of $0.68 per share and has a dividend yield of 1.5%. Vertiv pays an annual dividend of $0.25 per share and has a dividend yield of 0.1%. Genpact pays out 21.9% of its earnings in the form of a dividend. Vertiv pays out 9.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Genpact has raised its dividend for 6 consecutive years and Vertiv has raised its dividend for 2 consecutive years. Genpact is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Genpact and Vertiv”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Genpact	$4.77 billion	1.66	$513.67 million	$3.10	14.78
Vertiv	$8.01 billion	8.71	$495.80 million	$2.65	68.89

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

Summary

Vertiv beats Genpact on 10 of the 18 factors compared between the two stocks.

About Genpact

Genpact Limited provides business process outsourcing and information technology services in India, rest of Asia, North and Latin America, and Europe. It operates through three segments: Financial services; Consumer and Healthcare; and High Tech and Manufacturing. The Financial Services segment offers retail customer onboarding, customer service, collections, card servicing operations, loan and payment operations, commercial loan, equipment and auto loan, mortgage origination, compliance services, reporting and monitoring, and wealth management operations support; financial crime and risk management services; and underwriting support, new business processing, policy administration, claims management, catastrophe modeling and actuarial services, as well as property and casualty claims. The Consumer and Healthcare segment provides demand generation, sensing and planning, supply chain planning and management, pricing and trade promotion management, deduction recovery management, order management, and digital commerce; and end-to-end claim lifecycle management, from claims processing and adjudication to claims recovery and payment integrity, revenue cycle management, health equity analytics, and care services. The High Tech and Manufacturing segment offers industry-specific solutions for trust and safety, advertising sales support, customer and user experience, and customer care support; and direct and indirect procurement, logistics, field, aftermarket support, and engineering services. It also provides digital operation services; data-tech-Al services; finance and accounting services, such as accounts payable, invoice-to-cash, record to report, financial planning and analysis, and enterprise risk and compliance; CFO advisory services; supply chain, and sourcing and procurement services; sales and commercial, and marketing and experience services; and environmental, social and governance services. The company was founded in 1997 and is based in Hamilton, Bermuda.

About Vertiv

Vertiv Holdings Co, together with its subsidiaries, designs, manufactures, and services critical digital infrastructure technologies and life cycle services for data centers, communication networks, and commercial and industrial environments in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. It offers AC and DC power management products, switchgear and busbar products, thermal management products, integrated rack systems, modular solutions, and management systems for monitoring and controlling digital infrastructure that are integral to the technologies used for various services, including e-commerce, online banking, file sharing, video on-demand, energy storage, wireless communications, Internet of Things, and online gaming. The company also provides lifecycle management services, predictive analytics, and professional services for deploying, maintaining, and optimizing its products and their related systems; and preventative maintenance, acceptance testing, engineering and consulting, performance assessments, remote monitoring, training, spare parts, and digital critical infrastructure software services. It offers its products primarily under the Vertiv, Liebert, NetSure, Geist, E&I, Powerbar, and Avocent brands. The company serves cloud services, financial services, healthcare, transportation, manufacturing, energy, education, government, social media, and retail industries through a network of direct sales professionals, independent sales representatives, channel partners, and original equipment manufacturers. Vertiv Holdings Co is headquartered in Westerville, Ohio.