Head to Head Review: Vertiv (NYSE:VRT) and Genpact (NYSE:G)

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Vertiv and Genpact, as reported by MarketBeat.com.

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

Vertiv currently has a consensus target price of $187.89, indicating a potential downside of 2.96%. Genpact has a consensus target price of $50.50, indicating a potential upside of 12.73%. Given Genpact’s higher probable upside, analysts clearly believe Genpact is more favorable than Vertiv.

Volatility & Risk

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

Profitability

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

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

Institutional & Insider Ownership

89.9% of Vertiv shares are held by institutional investors. Comparatively, 96.0% of Genpact shares are held by institutional investors. 5.0% of Vertiv shares are held by company insiders. Comparatively, 2.8% of Genpact shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Vertiv pays an annual dividend of $0.25 per share and has a dividend yield of 0.1%. Genpact pays an annual dividend of $0.68 per share and has a dividend yield of 1.5%. Vertiv pays out 9.4% of its earnings in the form of a dividend. Genpact pays out 21.9% 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. Vertiv has increased its dividend for 2 consecutive years and Genpact has increased its dividend for 6 consecutive years. Genpact is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vertiv	$8.01 billion	9.24	$495.80 million	$2.65	73.06
Genpact	$4.77 billion	1.62	$513.67 million	$3.10	14.45

Genpact has lower revenue, but higher earnings 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 11 of the 18 factors compared between the two stocks.

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.

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.