CA (NASDAQ: CA) and GDS (NASDAQ:GDS) are both technology companies, but which is the better business? We will compare the two companies based on the strength of their profitability, risk, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings and target prices for CA and GDS, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CA 3 9 4 0 2.06
GDS 0 0 1 0 3.00

CA currently has a consensus price target of $33.44, indicating a potential downside of 0.11%. GDS has a consensus price target of $14.00, indicating a potential downside of 24.89%. Given CA’s higher probable upside, equities research analysts plainly believe CA is more favorable than GDS.

Institutional & Insider Ownership

69.1% of CA shares are owned by institutional investors. Comparatively, 17.4% of GDS shares are owned by institutional investors. 0.9% of CA shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

CA pays an annual dividend of $1.02 per share and has a dividend yield of 3.0%. GDS does not pay a dividend. CA pays out 59.0% of its earnings in the form of a dividend.

Profitability

This table compares CA and GDS’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CA 17.83% 15.74% 7.50%
GDS -19.71% -9.54% -3.04%

Earnings and Valuation

This table compares CA and GDS’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CA $4.04 billion 3.47 $775.00 million $1.73 19.35
GDS $152.09 million 11.94 -$41.60 million ($0.56) -33.29

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

Summary

CA beats GDS on 11 of the 14 factors compared between the two stocks.

About CA

CA, Inc. (CA) is engaged in providing software solutions enabling customers to plan, develop, manage and secure applications and enterprise environments across distributed, cloud, mobile and mainframe platforms. The Company operates through three business segments: Mainframe Solutions, Enterprise Solutions and Services. Its Mainframe Solutions and Enterprise Solutions segments comprise the Company’s software business organized by the nature of its software offerings and the platform on which the products operate. The Services segment comprises product implementation, consulting, customer education, customer training and application management services. CA’s Mainframe Solutions segment consists of various product offerings, including Application Development, Databases and Database Management, Security & Compliance, and Systems and Operations Management. The Enterprise Solutions segment consists of various product offerings, including Agile Management, DevOps and Security.

About GDS

GDS Holdings Ltd is a developer and operator of data centers in China. The Company is engaged in design, build-out and operation of data centers. It operates as a carrier and cloud neutral, which enables its customers to connect to all the People’s Republic of China telecommunications carriers, and to access a number of the People’s Republic of China cloud service providers, whom it hosts in its facilities. The Company’s base of approximately 370 customers consists of Internet companies, financial institutions, telecommunications and information technology (IT) service providers, and domestic private sector and multinational corporations. It serves a community of approximately 160 People’s Republic of China and foreign financial institutions across the banking, insurance, asset management, brokerage, digital payment and financial information verticals. The Company operates its data centers in Shanghai, Beijing, Shenzhen, Guangzhou and Chengdu.

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