Critical Analysis: Genpact (G) & Huron Consulting Group (HURN)

Genpact (NYSE: G) and Huron Consulting Group (NASDAQ:HURN) are both business services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, profitability, risk, earnings, valuation and institutional ownership.

Profitability

This table compares Genpact and Huron Consulting Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Genpact 10.18% 23.86% 9.71%
Huron Consulting Group -17.09% 7.50% 3.83%

Risk & Volatility

Genpact has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500. Comparatively, Huron Consulting Group has a beta of 0.12, suggesting that its share price is 88% less volatile than the S&P 500.

Earnings & Valuation

This table compares Genpact and Huron Consulting Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Genpact $2.57 billion 2.47 $269.68 million $1.38 23.86
Huron Consulting Group $797.98 million 1.12 $37.61 million ($6.35) -6.35

Genpact has higher revenue and earnings than Huron Consulting Group. Huron Consulting Group is trading at a lower price-to-earnings ratio than Genpact, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

91.2% of Genpact shares are owned by institutional investors. Comparatively, 89.6% of Huron Consulting Group shares are owned by institutional investors. 1.4% of Genpact shares are owned by insiders. Comparatively, 2.7% of Huron Consulting Group shares are owned by 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

Genpact pays an annual dividend of $0.24 per share and has a dividend yield of 0.7%. Huron Consulting Group does not pay a dividend. Genpact pays out 17.4% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Genpact and Huron Consulting Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Genpact 0 2 6 0 2.75
Huron Consulting Group 0 2 3 0 2.60

Genpact presently has a consensus price target of $33.14, indicating a potential upside of 0.68%. Huron Consulting Group has a consensus price target of $48.00, indicating a potential upside of 19.11%. Given Huron Consulting Group’s higher probable upside, analysts plainly believe Huron Consulting Group is more favorable than Genpact.

Summary

Genpact beats Huron Consulting Group on 13 of the 16 factors compared between the two stocks.

About Genpact

Genpact Limited is engaged in providing digitally powered business process management and services. The Company is also engaged in designing, transforming and running a combination of processes, as well as providing solutions that combine elements of its service offerings. The Company’s segments include Business process outsourcing and Information technology services. The Company offers various vertical activities, which include banking and financial services, capital markets, consumer product goods services, healthcare, infrastructure and manufacturing services, insurance and life sciences. In addition to these vertical activities, it also offers analytics and research, collections and customer services, consulting and transformation services, core industry operations services, enterprise application services, finance and accounting (F&A) services, information technology (IT) infrastructure management services, and supply chain and procurement services.

About Huron Consulting Group

Huron Consulting Group Inc. is a global professional services firm. The Company offers solutions in operations, advisory services, technology and analytics for healthcare, higher education, life sciences and commercial sectors. The Company’s segments include Healthcare, Education and Life Sciences, and Business Advisory. Its Healthcare segment provides advisory services, from strategy setting through implementation, in the areas of organizational and resource alignment, clinical transformation, financial and operational performance, patient and caregiver engagement, and technology implementation and optimization. Its Education and Life Sciences segment provides management consulting and technology solutions to the higher education and academic medical centers, pharmaceutical and medical device, biotechnology and research industries. The Business Advisory segment’s primary service lines include Enterprise Solutions and Analytics, and Business Advisory.

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