Analyzing Cognizant Technology Solutions (CTSH) & Its Competitors

Cognizant Technology Solutions (NASDAQ:CTSH) is one of 271 public companies in the “IT Services” industry, but how does it weigh in compared to its rivals? We will compare Cognizant Technology Solutions to similar companies based on the strength of its valuation, analyst recommendations, profitability, institutional ownership, risk, dividends and earnings.

Insider & Institutional Ownership

92.4% of Cognizant Technology Solutions shares are held by institutional investors. Comparatively, 36.7% of shares of all “IT Services” companies are held by institutional investors. 0.4% of Cognizant Technology Solutions shares are held by insiders. Comparatively, 20.4% of shares of all “IT Services” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk and Volatility

Cognizant Technology Solutions has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, Cognizant Technology Solutions’ rivals have a beta of 2.16, suggesting that their average share price is 116% more volatile than the S&P 500.

Earnings & Valuation

This table compares Cognizant Technology Solutions and its rivals revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Cognizant Technology Solutions	$21.89 billion	$2.23 billion	12.14
Cognizant Technology Solutions Competitors	$3.32 billion	$227.67 million	-20.84

Cognizant Technology Solutions has higher revenue and earnings than its rivals. Cognizant Technology Solutions is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Dividends

Cognizant Technology Solutions pays an annual dividend of $1.32 per share and has a dividend yield of 2.0%. Cognizant Technology Solutions pays out 24.1% of its earnings in the form of a dividend. As a group, “IT Services” companies pay a dividend yield of 2.4% and pay out 71.1% of their earnings in the form of a dividend. Cognizant Technology Solutions has increased its dividend for 6 consecutive years.

Profitability

This table compares Cognizant Technology Solutions and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cognizant Technology Solutions	11.75%	17.72%	12.60%
Cognizant Technology Solutions Competitors	-191.32%	-32.18%	-8.63%

Analyst Ratings

This is a summary of current ratings and price targets for Cognizant Technology Solutions and its rivals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cognizant Technology Solutions	0	14	10	0	2.42
Cognizant Technology Solutions Competitors	1989	5645	9448	342	2.47

Cognizant Technology Solutions presently has a consensus price target of $68.17, suggesting a potential upside of 2.44%. As a group, “IT Services” companies have a potential upside of 31.76%. Given Cognizant Technology Solutions’ rivals stronger consensus rating and higher probable upside, analysts plainly believe Cognizant Technology Solutions has less favorable growth aspects than its rivals.

Summary

Cognizant Technology Solutions beats its rivals on 8 of the 15 factors compared.

About Cognizant Technology Solutions

Cognizant Technology Solutions Corporation, a professional services company, provides consulting and technology, and outsourcing services in North America, Europe, and internationally. It operates through four segments: Financial Services, Health Sciences, Products and Resources, and Communications, Media and Technology. The company provides customer experience, robotic process automation, analytics, and AI services in areas, such as digital lending, fraud detection, and next generation payments; the shift towards consumerism, outcome-based contracting, digital health, delivering integrated seamless, omni-channel, and patient-centered experience; and services that drive operational improvements in areas, such as clinical development, pharmacovigilance, and manufacturing, as well as claims processing, enrollment, membership, and billing to healthcare providers and payers, and life sciences companies, including pharmaceutical, biotech, and medical device companies. It offers solution to manufacturers, automakers, retailers and travel and hospitality companies, as well as companies providing logistics, energy and utility services; and digital content, business process improvement, technology modernization, and the creation of unified and compelling user experience services to communications, media and entertainment, education, and information services and technology companies. The company was incorporated in 1988 and is headquartered in Teaneck, New Jersey.