Analyzing Diebold Nixdorf (NYSE:DBD) and Xerox (NASDAQ:XRX)

Diebold Nixdorf (NYSE:DBD) and Xerox (NASDAQ:XRX) are both technology companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.

Institutional & Insider Ownership

97.0% of Diebold Nixdorf shares are owned by institutional investors. Comparatively, 85.4% of Xerox shares are owned by institutional investors. 1.1% of Diebold Nixdorf shares are owned by company insiders. Comparatively, 1.5% of Xerox shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and target prices for Diebold Nixdorf and Xerox, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diebold Nixdorf	0	0	3	0	3.00
Xerox	2	1	1	0	1.75

Diebold Nixdorf presently has a consensus target price of $100.00, suggesting a potential upside of 47.58%. Xerox has a consensus target price of $4.17, suggesting a potential upside of 59.64%. Given Xerox’s higher possible upside, analysts plainly believe Xerox is more favorable than Diebold Nixdorf.

Volatility and Risk

Diebold Nixdorf has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500. Comparatively, Xerox has a beta of 2.45, indicating that its stock price is 145% more volatile than the S&P 500.

Dividends

Diebold Nixdorf pays an annual dividend of $0.40 per share and has a dividend yield of 0.6%. Xerox pays an annual dividend of $0.10 per share and has a dividend yield of 3.8%. Diebold Nixdorf pays out 13.1% of its earnings in the form of a dividend. Xerox pays out -1.4% 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. Xerox is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Diebold Nixdorf and Xerox”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diebold Nixdorf	$3.87 billion	0.59	$94.60 million	$3.06	22.14
Xerox	$7.02 billion	0.05	-$1.03 billion	($7.38)	-0.35

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

Profitability

This table compares Diebold Nixdorf and Xerox’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Diebold Nixdorf	2.87%	21.16%	5.90%
Xerox	-11.93%	17.61%	0.65%

Summary

Diebold Nixdorf beats Xerox on 10 of the 16 factors compared between the two stocks.

About Diebold Nixdorf

Diebold Nixdorf, Incorporated engages in the automating, digitizing, and transforming the way people bank and shop worldwide. It operates through two segments, Banking and Retail. The company offers cash recyclers and dispensers, intelligent deposit terminals, teller automation tools, and kiosk technologies, as well as physical security solutions; and front-end applications for consumer connection points and back-end platforms that manage channel transactions, operations and integration, and facilitate omnichannel transactions, endpoint monitoring, remote asset management, customer marketing, merchandise management, and analytics. It also provides banking product-related services comprising proactive monitoring and rapid resolution of incidents through remote service capabilities or an on-site visit; first- and second-line maintenance, preventive maintenance, and on-demand services; managed and outsourcing services, such as business processes, solution management, upgrades, and transaction processing; and cash management services. In addition, the company offers DN Vynamic software suite to simplify and enhance the consumer experience; modular and integrated point of sale and self-checkout terminals; printers, scales, and mobile scanners; and banknote and coin processing systems, as well as ordering kiosks. Additionally, it provides retail customer's product-related services, such as on-demand and professional services; maintenance and availability services; implementation services; managed mobility services; monitoring and advanced analytics; and store life-cycle management services. The company was formerly known as Diebold, Incorporated and changed its name to Diebold Nixdorf, Incorporated in December 2016. Diebold Nixdorf, Incorporated was founded in 1859 and is headquartered in North Canton, Ohio.

About Xerox

Xerox Holdings Corporation, together with its subsidiaries, operates as a workplace technology company that integrates hardware, services, and software for enterprises in the Americas, Europe, the Middle East, Africa, India, and internationally. The company operates through two segments, Print and Other; and FITTLE. The Print and Other segment designs, develops, and sells document systems, solutions, and services; and IT and software products and services. The FITTLE segment offers financing solutions for direct channel customer purchases; and lease financing to end-users. It also offers workplace solutions comprising desktop monochrome, color, and multifunction printers, and ConnectKey software; digital printing presses and light production devices; and digital services that support workflow automation, personalization and communication software, content management solutions, and digitization services. In addition, the company provides graphic communications, in-plant, and production solutions; FreeFlow, a software solutions for the automation and integration of processing of print job comprising file preparation, final production, and electronic publishing; and IT services, end user computing devices, network infrastructure, and communications technology, as well as technology product support, professional engineering, and commercial robotic process automation. Further, it sells paper products and standalone software, such as CareAR, DocuShare, and XMPie; and invests in startups. The company sells its products through its direct sales force, distributors, independent agents, dealers, value-added resellers, systems integrators, and e-commerce marketplaces. The company was formerly known as Xerox Corporation and changed its name to Xerox Holdings Corporation in August 2019. Xerox Holdings Corporation was founded in 1903 and is headquartered in Norwalk, Connecticut.