Critical Analysis: BroadSoft (BSFT) & Convergys Corp (CVG)
BroadSoft (NASDAQ: BSFT) and Convergys Corp (NYSE:CVG) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, earnings, risk and analyst recommendations.
Institutional & Insider Ownership
98.7% of Convergys Corp shares are held by institutional investors. 1.5% of BroadSoft shares are held by insiders. Comparatively, 1.7% of Convergys Corp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This is a breakdown of current recommendations for BroadSoft and Convergys Corp, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
BroadSoft currently has a consensus price target of $48.38, suggesting a potential downside of 2.27%. Given BroadSoft’s stronger consensus rating and higher probable upside, research analysts plainly believe BroadSoft is more favorable than Convergys Corp.
Convergys Corp pays an annual dividend of $0.40 per share and has a dividend yield of 1.7%. BroadSoft does not pay a dividend. Convergys Corp pays out 28.4% of its earnings in the form of a dividend. Convergys Corp has raised its dividend for 4 consecutive years.
Volatility and Risk
BroadSoft has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500. Comparatively, Convergys Corp has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500.
Earnings and Valuation
This table compares BroadSoft and Convergys Corp’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|BroadSoft||$354.53 million||4.33||$24.27 million||($0.29)||-170.69|
|Convergys Corp||$2.91 billion||0.76||$363.00 million||$1.41||16.82|
Convergys Corp has higher revenue and earnings than BroadSoft. BroadSoft is trading at a lower price-to-earnings ratio than Convergys Corp, indicating that it is currently the more affordable of the two stocks.
This table compares BroadSoft and Convergys Corp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Convergys Corp beats BroadSoft on 11 of the 16 factors compared between the two stocks.
BroadSoft, Inc. is a global provider of software and services that enable telecommunications service providers to deliver hosted, cloud-based Unified Communications (UC) to their enterprise customers. The BroadSoft Business solution is a communications and collaboration offering that enables telecommunications service providers to offer businesses and other enterprises UC features and functionalities on a cloud-delivered basis without the need for traditional premise-based private branch exchange (PBX) equipment. BroadSoft Business includes its UC-One, Team-One and CC-One applications. The capabilities of the BroadSoft Business offering can be accessed through desk phones, smartphones, tablets, laptops and personal computers. Its BroadWorks SIP Trunking solution enables service providers to provide Internet protocol (IP) interconnectivity and additional services to enterprises that already have premise-based PBXs. Its training services include systems administration and provisioning.
About Convergys Corp
Convergys Corporation is engaged in customer experience outsourcing. The Company’s geographical segments include North America and Rest of World. The Company offers services across industries, including communications and media, technology, financial services, retail, government and healthcare. The Company helps businesses to create customer experiences across multiple interaction channels, such as voice, chat, e-mail and interactive voice response. The Company provides solutions across the customer lifecycle, including sales, customer service, technical support, customer retention and collections. Its omni-channel contact center technology solutions include multichannel interaction solutions, cross-channel integration framework and robotic process automation. It offers analytics and consulting, and software solutions, including integrated customer experience analytics, post-contact surveys, relational loyalty research, and customer segmentation and profiling.
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