Comparing CDK Global (CDK) & The Competition

CDK Global (NASDAQ: CDK) is one of 101 public companies in the “Enterprise Software” industry, but how does it weigh in compared to its competitors? We will compare CDK Global to similar businesses based on the strength of its analyst recommendations, profitability, institutional ownership, valuation, earnings, dividends and risk.

Valuation & Earnings

This table compares CDK Global and its competitors revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
CDK Global $2.22 billion $295.60 million 33.23
CDK Global Competitors $1.76 billion $288.64 million -2.62

CDK Global has higher revenue and earnings than its competitors. CDK Global 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.

Dividends

CDK Global pays an annual dividend of $0.56 per share and has a dividend yield of 0.8%. CDK Global pays out 27.2% of its earnings in the form of a dividend. As a group, “Enterprise Software” companies pay a dividend yield of 0.7% and pay out 31.8% of their earnings in the form of a dividend. CDK Global is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Profitability

This table compares CDK Global and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CDK Global 13.42% 515.77% 13.57%
CDK Global Competitors -20.87% -214.83% -6.65%

Insider & Institutional Ownership

83.7% of CDK Global shares are held by institutional investors. Comparatively, 59.8% of shares of all “Enterprise Software” companies are held by institutional investors. 0.4% of CDK Global shares are held by company insiders. Comparatively, 22.9% of shares of all “Enterprise Software” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for CDK Global and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CDK Global 0 1 3 0 2.75
CDK Global Competitors 369 2198 4134 119 2.59

CDK Global presently has a consensus price target of $73.00, suggesting a potential upside of 6.63%. As a group, “Enterprise Software” companies have a potential downside of 0.09%. Given CDK Global’s stronger consensus rating and higher probable upside, analysts clearly believe CDK Global is more favorable than its competitors.

Risk and Volatility

CDK Global has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500. Comparatively, CDK Global’s competitors have a beta of 1.06, meaning that their average stock price is 6% more volatile than the S&P 500.

Summary

CDK Global beats its competitors on 12 of the 15 factors compared.

CDK Global Company Profile

CDK Global, Inc. provides integrated information technology and digital marketing solutions. The Company’s segments include Retail Solutions North America, Advertising North America and CDK International. Through its Retail Solutions North America segment, the Company provides technology-based solutions, including automotive Website platforms, that help automotive retailers, original equipment manufacturers (OEMs) and other industry participants manage the acquisition, sale, financing, insuring, parts supply, repair and maintenance of vehicles. Through its Advertising North America segment, the Company provides advertising solutions, including management of digital advertising spend, for OEMs and automotive retailers. As of June 30, 2016, through its CDK International segment, it provided technology-based solutions similar to the retail solutions provided in its Retail Solutions North America segment in approximately 100 countries outside of the United States and Canada.

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