Reviewing Cognizant Technology Solutions (CTSH) & The Competition

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

Insider & Institutional Ownership

92.4% of Cognizant Technology Solutions shares are held by institutional investors. Comparatively, 36.4% 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 company is poised for long-term growth.

Valuation and Earnings

This table compares Cognizant Technology Solutions and its competitors top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Cognizant Technology Solutions	$21.11 billion	$2.23 billion	11.86
Cognizant Technology Solutions Competitors	$3.34 billion	$227.06 million	-24.87

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

Profitability

This table compares Cognizant Technology Solutions and its competitors’ 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	-189.78%	-32.50%	-8.33%

Volatility & Risk

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’ competitors have a beta of 2.16, suggesting that their average share price is 116% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Cognizant Technology Solutions and its competitors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cognizant Technology Solutions	0	14	10	0	2.42
Cognizant Technology Solutions Competitors	2002	5664	9488	342	2.47

Cognizant Technology Solutions currently has a consensus price target of $68.17, indicating a potential upside of 4.87%. As a group, “IT Services” companies have a potential upside of 25.78%. Given Cognizant Technology Solutions’ competitors stronger consensus rating and higher possible upside, analysts clearly believe Cognizant Technology Solutions has less favorable growth aspects than its competitors.

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 2.3% 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.

Summary

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

Cognizant Technology Solutions Company Profile

Cognizant Technology Solutions is a professional services company that helps businesses use technology to modernize operations and develop digital capabilities. Its services include IT consulting, application development and maintenance, cloud and infrastructure services, data and artificial intelligence, engineering, and business process services. The company serves clients across industries including financial services, healthcare, manufacturing, communications, media, and retail. Its operations span North America, Europe, and Asia-Pacific, with a significant global delivery network.