Analyzing SGS (OTCMKTS:SGSOY) and Concentrix (NASDAQ:CNXC)

SGS (OTCMKTS:SGSOY) and Concentrix (NASDAQ:CNXC) are both business services companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, profitability, valuation, dividends and risk.

Earnings & Valuation

This table compares SGS and Concentrix”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SGS	$8.38 billion	2.65	$806.28 million	N/A	N/A
Concentrix	$9.83 billion	0.17	-$1.28 billion	($21.55)	-1.29

SGS has higher earnings, but lower revenue than Concentrix.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for SGS and Concentrix, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SGS	1	3	2	4	2.90
Concentrix	1	1	3	0	2.40

Concentrix has a consensus target price of $48.50, indicating a potential upside of 74.34%. Given Concentrix’s higher probable upside, analysts plainly believe Concentrix is more favorable than SGS.

Volatility & Risk

SGS has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500. Comparatively, Concentrix has a beta of 0.43, meaning that its stock price is 57% less volatile than the S&P 500.

Dividends

SGS pays an annual dividend of $0.19 per share and has a dividend yield of 1.7%. Concentrix pays an annual dividend of $1.44 per share and has a dividend yield of 5.2%. Concentrix pays out -6.7% of its earnings in the form of a dividend. Concentrix has raised its dividend for 3 consecutive years. Concentrix is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares SGS and Concentrix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SGS	N/A	N/A	N/A
Concentrix	-13.35%	17.80%	5.45%

Insider & Institutional Ownership

90.3% of Concentrix shares are owned by institutional investors. 0.9% of Concentrix shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Concentrix beats SGS on 10 of the 16 factors compared between the two stocks.

About SGS

SGS SA provides inspection, testing, and verification services in Europe, Africa, the Middle East, the Americas, and the Asia Pacific. It operates in five segments: Connectivity & Products, Health & Nutrition, Industries & Environment, Natural Resources, and Business Assurance. The company provides laboratory testing, product inspection and consulting, process assessment, technical and transactional assistance; and automotive, connectivity, softlines and accessories, and hardgoods, toys, and juvenile products, as well as government and trade facilitation services. In addition, it offers a range of testing, inspection and certification solutions for the crop science, food, health science, and cosmetics and hygiene industries; field services, technical assessment, and advisory services; and services related to industrial, public health and safety, environmental testing, and public mandates. Further, it provides assessment, auditing, and certification, supply chain assurance, training, consulting, and sustainability assurance services; agricultural commodities, geochemistry, laboratory testing petroleum and chemicals, metallurgy and consulting, mineral and metal commodities, and oil, gas, and chemical commodities; and sustainability solutions. The company serves the agriculture and food, chemical, construction, consumer and retail, energy, industrial manufacturing, life sciences, mining, oil and gas, public, and transportation sectors. SGS SA was founded in 1878 and is headquartered in Geneva, Switzerland.

About Concentrix

Concentrix Corporation engages in the provision of technology-infused customer experience (CX) solutions worldwide. The company provides CX process optimization, technology innovation, front- and back-office automation, analytics, and business transformation services, across various channels of communication, such as voice, chat, email, social media, asynchronous messaging, and custom applications. It also offers customer lifecycle management; customer experience/user experience strategy and design; analytics and actionable insights; digital transformation services that design and engineer CX solutions to enable efficient customer self-service and build customer loyalty; customer engagement solutions and services that address the entirety of the customer lifecycle; AI technology that can intelligently act on customer intent to improve customer experience with non-human engagement; voice of the customer and analytics solutions to gather and analyze customer feedback to foster loyalty to, and growth with, clients; analytics and consulting solutions that synthesize data and provide professional insight to improve clients’ customer experience strategies; vertical business process outsourcing (BPO) services; and back office BPO services that support clients in non-customer facing areas. The company’s clients include technology and consumer electronics, retail, travel and e-commerce, communications and media, banking, financial services and insurance, healthcare, and others, as well as global IPOs, social brands, and banks. Concentrix Corporation was founded in 2004 and is based in Newark, California.