Contrasting EPAM Systems (NYSE:EPAM) & DXC Technology (NYSE:DXC)

DXC Technology (NYSE:DXC) and EPAM Systems (NYSE:EPAM) are both mid-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, profitability, valuation, dividends and institutional ownership.

Insider and Institutional Ownership

96.2% of DXC Technology shares are owned by institutional investors. Comparatively, 91.6% of EPAM Systems shares are owned by institutional investors. 0.6% of DXC Technology shares are owned by insiders. Comparatively, 4.3% of EPAM Systems shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares DXC Technology and EPAM Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DXC Technology	2.96%	18.59%	4.69%
EPAM Systems	7.91%	14.00%	10.89%

Volatility and Risk

DXC Technology has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500. Comparatively, EPAM Systems has a beta of 1.67, meaning that its stock price is 67% more volatile than the S&P 500.

Valuation & Earnings

This table compares DXC Technology and EPAM Systems”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DXC Technology	$12.71 billion	0.17	$389.00 million	$2.03	6.23
EPAM Systems	$5.30 billion	1.88	$454.53 million	$6.55	27.52

EPAM Systems has lower revenue, but higher earnings than DXC Technology. DXC Technology is trading at a lower price-to-earnings ratio than EPAM Systems, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings for DXC Technology and EPAM Systems, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DXC Technology	2	6	0	0	1.75
EPAM Systems	1	4	12	1	2.72

DXC Technology currently has a consensus price target of $15.00, suggesting a potential upside of 18.54%. EPAM Systems has a consensus price target of $213.81, suggesting a potential upside of 18.61%. Given EPAM Systems’ stronger consensus rating and higher probable upside, analysts clearly believe EPAM Systems is more favorable than DXC Technology.

Summary

EPAM Systems beats DXC Technology on 12 of the 15 factors compared between the two stocks.

About DXC Technology

DXC Technology Company, together with its subsidiaries, provides information technology services and solutions in the United States, the United Kingdom, rest of Europe, Australia, and internationally. It operates in two segments, Global Business Services (GBS) and Global Infrastructure Services (GIS). The GBS segment offers a portfolio of analytics services and extensive partner ecosystem that help its customers to gain insights, automate operations, and accelerate their transformation journeys; and software engineering, consulting, and data analytics solutions, which enable businesses to run and manage their mission-critical functions, transform their operations, and develop new ways of doing business. This segment also simplifies, modernize, and accelerate mission-critical applications that support business agility and growth through applications services; provides proprietary modular insurance software and platforms; and operates a wide spectrum of insurance business process services, as well as helps to operate and improve bank cards, payment and lending process and operations, and customer experiences. The GIS segment offers security services, such as IT security, operations and culture for migrating to the cloud, protecting data with a zero-trust strategy, and manage a security operation center; and cloud infrastructure and IT outsourcing services. This segment also delivers a consumer-like experience, centralize IT management, and support services, as well as improves the total cost of ownership; and orchestrates hybrid cloud and multicloud environments. The company markets and sells its products through direct sales force to commercial businesses and public sector enterprises. DXC Technology Company was founded in 1959 and is headquartered in Ashburn, Virginia.

About EPAM Systems

EPAM Systems, Inc. provides digital platform engineering and software development services worldwide. The company offers engineering services, including requirements analysis and platform selection, customization, cross-platform migration, implementation, and integration; infrastructure management services, such as software development, testing, performance tuning, deployment, maintenance, and support services. It also provides operation solutions comprising integrated engineering practices and smart automation services. In addition, the company offers business, experience, technology, data, and technical advisory consulting services; and digital and service design solutions, which comprise strategy, design, creative, and program management services, as well as physical product development, such as artificial intelligence, robotics, and virtual reality. The company serves the financial services, travel and consumer, software and hi-tech, business information and media, life sciences and healthcare, and other industries EPAM Systems, Inc. was founded in 1993 and is headquartered in Newtown, Pennsylvania.