Head to Head Analysis: Leidos (NYSE:LDOS) versus Concentrix (NASDAQ:CNXC)

Concentrix (NASDAQ:CNXC) and Leidos (NYSE:LDOS) are both industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, profitability, valuation, dividends and risk.

Dividends

Concentrix pays an annual dividend of $1.48 per share and has a dividend yield of 5.9%. Leidos pays an annual dividend of $1.72 per share and has a dividend yield of 1.5%. Concentrix pays out -3.8% of its earnings in the form of a dividend. Leidos pays out 16.0% 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. Concentrix has raised its dividend for 3 consecutive years and Leidos has raised its dividend for 6 consecutive years. Concentrix is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Concentrix and Leidos’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Concentrix	-23.99%	25.00%	6.07%
Leidos	7.80%	30.81%	10.78%

Valuation and Earnings

This table compares Concentrix and Leidos”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Concentrix	$9.97 billion	0.15	-$1.28 billion	($38.90)	-0.64
Leidos	$17.17 billion	0.86	$1.45 billion	$10.72	10.99

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

Insider and Institutional Ownership

90.3% of Concentrix shares are owned by institutional investors. Comparatively, 76.1% of Leidos shares are owned by institutional investors. 0.9% of Concentrix shares are owned by company insiders. Comparatively, 0.8% of Leidos shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for Concentrix and Leidos, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Concentrix	1	2	3	0	2.33
Leidos	0	10	6	1	2.47

Concentrix currently has a consensus target price of $33.50, suggesting a potential upside of 34.48%. Leidos has a consensus target price of $160.29, suggesting a potential upside of 36.02%. Given Leidos’ stronger consensus rating and higher possible upside, analysts clearly believe Leidos is more favorable than Concentrix.

Volatility & Risk

Concentrix has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500. Comparatively, Leidos has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500.

Summary

Leidos beats Concentrix on 14 of the 18 factors compared between the two stocks.

About Concentrix

Concentrix Corporation engages in the provision of technology-infused customer experience (CX) solutions worldwide. The company provides CX process optimization, technology innovation, front- and back-office automation, analytics, and business transformation services, across various channels of communication, such as voice, chat, email, social media, asynchronous messaging, and custom applications. It also offers customer lifecycle management; customer experience/user experience strategy and design; analytics and actionable insights; digital transformation services that design and engineer CX solutions to enable efficient customer self-service and build customer loyalty; customer engagement solutions and services that address the entirety of the customer lifecycle; AI technology that can intelligently act on customer intent to improve customer experience with non-human engagement; voice of the customer and analytics solutions to gather and analyze customer feedback to foster loyalty to, and growth with, clients; analytics and consulting solutions that synthesize data and provide professional insight to improve clients’ customer experience strategies; vertical business process outsourcing (BPO) services; and back office BPO services that support clients in non-customer facing areas. The company’s clients include technology and consumer electronics, retail, travel and e-commerce, communications and media, banking, financial services and insurance, healthcare, and others, as well as global IPOs, social brands, and banks. Concentrix Corporation was founded in 2004 and is based in Newark, California.

About Leidos

Leidos Holdings, Inc., together with its subsidiaries, provides services and solutions in the defense, intelligence, civil, and health markets in the United States and internationally. The company operates through Defense Solutions, Civil, and Health segments. The Defense Solutions segment offers national security solutions and systems for air, land, sea, space, and cyberspace for the U.S. Intelligence Community, the Department of Defense, the space development agency, the National Aeronautics and Space Administration, defense information systems agency, military services, and government agencies of U.S. allies abroad, as well as other federal and commercial customers in the national security industry. The solutions include technology, large-scale systems, command and control platforms, data analytics, logistics, and cybersecurity solutions, as well as intelligence analysis and operations support services to critical missions. The Civil segment provides systems integration services to air navigation service providers, including the federal aviation administration, the En route automation modernization, advanced technology oceanic procedure, time based flow management, terminal flight data management, geo-7, and future flight services, as well as enterprise-information display systems; and security detection services. It also offers information technology (IT) solutions in cloud computing, mobility, application modernization, DevOps, data center, network modernization, asset management, help desk operations, and digital workplace enablement; and environment, energy, and infrastructure services. The Health segment offers solutions to federal and commercial customers responsible for health and well-being of people, include health information management, managed health, digital modernization, and life sciences research and development services. Leidos Holdings, Inc. was founded in 1969 and is headquartered in Reston, Virginia.