Comparing Wipro (NYSE:WIT) and Formula Systems (1985) (NYSE:FORTY)
Wipro (NYSE:WIT) and Formula Systems (1985) (NASDAQ:FORTY) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.
This table compares Wipro and Formula Systems (1985)’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Formula Systems (1985)||2.28%||4.46%||1.94%|
Wipro pays an annual dividend of $0.01 per share and has a dividend yield of 0.4%. Formula Systems (1985) pays an annual dividend of $0.65 per share and has a dividend yield of 1.3%. Wipro pays out 4.5% of its earnings in the form of a dividend. Formula Systems (1985) has raised its dividend for 2 consecutive years. Formula Systems (1985) is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of recent ratings and recommmendations for Wipro and Formula Systems (1985), as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Formula Systems (1985)||0||0||0||0||N/A|
Wipro currently has a consensus price target of $3.46, indicating a potential upside of 24.01%. Given Wipro’s higher probable upside, equities research analysts clearly believe Wipro is more favorable than Formula Systems (1985).
Earnings and Valuation
This table compares Wipro and Formula Systems (1985)’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Wipro||$8.47 billion||1.98||$1.30 billion||$0.22||12.68|
|Formula Systems (1985)||$1.70 billion||0.44||$38.82 million||N/A||N/A|
Wipro has higher revenue and earnings than Formula Systems (1985).
Institutional and Insider Ownership
2.2% of Wipro shares are held by institutional investors. Comparatively, 0.2% of Formula Systems (1985) shares are held by institutional investors. 1.0% of Wipro shares are held by insiders. Comparatively, 23.3% of Formula Systems (1985) shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Risk and Volatility
Wipro has a beta of 0.51, indicating that its stock price is 49% less volatile than the S&P 500. Comparatively, Formula Systems (1985) has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500.
Wipro beats Formula Systems (1985) on 8 of the 14 factors compared between the two stocks.
Wipro Limited operates as an information technology (IT), consulting, and business process services (BPS) company worldwide. The company's IT Services segment offers a range of IT and IT-enabled services, including digital strategy advisory, customer centric design, technology consulting, IT consulting, custom application design, development, re-engineering and maintenance, systems integration, package implementation, infrastructure services, analytics services, BPS, research and development services, and hardware and software design services to various enterprises. It serves customers in various industry verticals, such as banking, financial services, and insurance; health business; consumer business; energy, natural resources, and utilities; manufacturing; technology; and communications. The company's IT Products segment distributes third-party IT products comprising enterprise platforms, networking solutions, software and data storage products, contact center infrastructure, enterprise security, IT optimization technologies, video solutions, and end-user computing solutions. The company has research collaboration agreements with Tel Aviv University for core and applied research in image and text analytics using deep learning and sparse representation models and techniques; and IISc on technologies for autonomous vehicles. Wipro Limited was founded in 1945 and is headquartered in Bengaluru, India.
About Formula Systems (1985)
Formula Systems (1985) Ltd., through its subsidiaries, provides software, proprietary and non-proprietary software, and software product marketing and support services. The company offers computer and telecommunication infrastructure solutions; computer solutions to computer and communications infrastructures; cloud computing solutions; database and big data services; customer relations management, computer systems management infrastructures, Web world content management, database and data warehouse mining, application integration, database and systems, data management, and software development tools; and professional training courses and advanced professional studies. It also markets and sells computers and peripheral equipment to business customers. In addition, the company offers life, pension, and annuities platforms/solutions, including Sapiens ALIS, LifeSuite, Life Portraits, LifeApply, Sapiens INSIGHT, and Sapiens Closed Books; property and casualty/general insurance platforms/solutions, such as Sapiens IDIT, Adaptik Policy, Adaptik Billing, Stream Claim, Sapiens Stingray, PowerSuite, and CompSuite; and reinsurance software solutions comprising Sapiens Reinsurance, Freedom Reinsurance System, and Universal Reinsurance System. Further, it provides financial and compliance solutions that include eFreedom Annual Statement, PRO Financial General Ledger and Accounts Payable, Preferred Tax Enterprise Financial applications, Insurance Financial reporting, and Power2Play; Sapiens DECISION, a decision management platform; and technology-based solutions and digital insurance suites. Additionally, the company offers application development and business process integration platforms; vertical software solutions; vendor of software services and IT outsourcing software services; and professionals in various areas, as well as develops on-premise payroll software solutions. The company was founded in 1985 and is headquartered in Or Yehuda, Israel.
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