Head to Head Comparison: Wipro (NYSE:WIT) vs. DXC Technology (NYSE:DXC)

DXC Technology (NYSE:DXC) and Wipro (NYSE:WIT) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.

Institutional and Insider Ownership

96.2% of DXC Technology shares are owned by institutional investors. Comparatively, 2.4% of Wipro shares are owned by institutional investors. 0.6% of DXC Technology shares are owned by company insiders. Comparatively, 1.0% of Wipro shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

DXC Technology has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500. Comparatively, Wipro has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500.

Valuation and Earnings

This table compares DXC Technology and Wipro”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DXC Technology	$12.71 billion	0.19	$389.00 million	$2.03	6.92
Wipro	$10.43 billion	2.81	$1.54 billion	$0.15	18.63

Wipro has lower revenue, but higher earnings than DXC Technology. DXC Technology is trading at a lower price-to-earnings ratio than Wipro, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares DXC Technology and Wipro’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DXC Technology	2.93%	17.83%	4.52%
Wipro	15.06%	15.80%	10.38%

Analyst Ratings

This is a breakdown of current recommendations for DXC Technology and Wipro, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DXC Technology	2	6	0	0	1.75
Wipro	1	5	0	0	1.83

DXC Technology currently has a consensus target price of $15.00, indicating a potential upside of 6.80%. Given DXC Technology’s higher probable upside, analysts clearly believe DXC Technology is more favorable than Wipro.

Dividends

DXC Technology pays an annual dividend of $0.84 per share and has a dividend yield of 6.0%. Wipro pays an annual dividend of $0.10 per share and has a dividend yield of 3.6%. DXC Technology pays out 41.4% of its earnings in the form of a dividend. Wipro pays out 66.7% 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. DXC Technology is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

DXC Technology beats Wipro on 8 of the 15 factors compared between the two stocks.

About DXC Technology

DXC Technology Company, together with its subsidiaries, provides information technology services and solutions in the United States, the United Kingdom, rest of Europe, Australia, and internationally. It operates in two segments, Global Business Services (GBS) and Global Infrastructure Services (GIS). The GBS segment offers a portfolio of analytics services and extensive partner ecosystem that help its customers to gain insights, automate operations, and accelerate their transformation journeys; and software engineering, consulting, and data analytics solutions, which enable businesses to run and manage their mission-critical functions, transform their operations, and develop new ways of doing business. This segment also simplifies, modernize, and accelerate mission-critical applications that support business agility and growth through applications services; provides proprietary modular insurance software and platforms; and operates a wide spectrum of insurance business process services, as well as helps to operate and improve bank cards, payment and lending process and operations, and customer experiences. The GIS segment offers security services, such as IT security, operations and culture for migrating to the cloud, protecting data with a zero-trust strategy, and manage a security operation center; and cloud infrastructure and IT outsourcing services. This segment also delivers a consumer-like experience, centralize IT management, and support services, as well as improves the total cost of ownership; and orchestrates hybrid cloud and multicloud environments. The company markets and sells its products through direct sales force to commercial businesses and public sector enterprises. DXC Technology Company was founded in 1959 and is headquartered in Ashburn, Virginia.

About Wipro

Wipro Limited operates as an information technology (IT), consulting, and business process services company worldwide. It operates through IT Services and IT Products segments. The IT Services segment offers IT and IT-enabled services, including digital strategy advisory, customer-centric design, technology and IT consulting, custom application design, development, re-engineering and maintenance, systems integration, package implementation, cloud and infrastructure, business process, cloud, mobility and analytics, research and development, and hardware and software design services to enterprises. It serves customers in various industry sectors, such as communications, retail connectivity and services, consumer goods, healthcare, technology products and platforms, banking and financial services, energy, manufacturing and resources, capital markets and insurance, and hi-tech. The IT Products segment provides a range of third-party IT products comprising enterprise platforms, networking solutions, software and data storage products, contact center infrastructure, enterprise security, IT optimization technologies, video solutions, and end-user computing solutions. It serves enterprises in various industries primarily in the Indian market, which comprise the government, defense, IT and IT-enabled services, telecommunications, manufacturing, utilities, education, and financial services sectors. The company was incorporated in 1945 and is based in Bengaluru, India.