Reviewing Genpact (NYSE:G) & Broadridge Financial Solutions (NYSE:BR)

Genpact (NYSE:G) and Broadridge Financial Solutions (NYSE:BR) are both industrials companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.

Analyst Ratings

This is a breakdown of current ratings for Genpact and Broadridge Financial Solutions, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Genpact	0	7	2	0	2.22
Broadridge Financial Solutions	0	4	4	0	2.50

Genpact currently has a consensus price target of $41.89, suggesting a potential downside of 2.81%. Broadridge Financial Solutions has a consensus price target of $212.71, suggesting a potential upside of 10.00%. Given Broadridge Financial Solutions’ stronger consensus rating and higher probable upside, analysts plainly believe Broadridge Financial Solutions is more favorable than Genpact.

Profitability

This table compares Genpact and Broadridge Financial Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Genpact	11.04%	23.34%	10.68%
Broadridge Financial Solutions	13.94%	40.32%	12.85%

Volatility & Risk

Genpact has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500. Comparatively, Broadridge Financial Solutions has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500.

Dividends

Genpact pays an annual dividend of $0.75 per share and has a dividend yield of 1.7%. Broadridge Financial Solutions pays an annual dividend of $4.36 per share and has a dividend yield of 2.3%. Genpact pays out 21.9% of its earnings in the form of a dividend. Broadridge Financial Solutions pays out 48.2% 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. Genpact has raised its dividend for 6 consecutive years and Broadridge Financial Solutions has raised its dividend for 18 consecutive years. Broadridge Financial Solutions is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

96.0% of Genpact shares are owned by institutional investors. Comparatively, 90.0% of Broadridge Financial Solutions shares are owned by institutional investors. 1.6% of Genpact shares are owned by company insiders. Comparatively, 1.0% of Broadridge Financial Solutions shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Genpact and Broadridge Financial Solutions”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Genpact	$5.08 billion	1.42	$552.49 million	$3.43	12.57
Broadridge Financial Solutions	$7.48 billion	2.93	$1.12 billion	$9.05	21.37

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

Summary

Broadridge Financial Solutions beats Genpact on 14 of the 17 factors compared between the two stocks.

About Genpact

Genpact is a global professional services company that helps businesses improve operations and pursue digital transformation. Its services include business process management, consulting, data and analytics, artificial intelligence, and technology implementation. The company works with clients across industries such as banking and financial services, insurance, consumer goods, healthcare, life sciences, manufacturing, and technology. It serves organizations around the world through its global operations.

About Broadridge Financial Solutions

Broadridge Financial Solutions provides technology and operations services to financial institutions, public companies, and investors. Its platforms support investor communications, corporate governance, and the processing of financial transactions. The company’s services include preparing and distributing proxy materials and other shareholder communications, supporting shareholder voting, and providing solutions for trading, clearing, settlement, and asset servicing. Broadridge also offers technology for wealth and investment management, including portfolio and account management, data, and regulatory reporting.