Comparing Genpact (NYSE:G) and Jacobs Solutions (NYSE:J)

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

Analyst Recommendations

This is a breakdown of current ratings for Jacobs Solutions and Genpact, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Jacobs Solutions	0	6	6	0	2.50
Genpact	0	7	2	0	2.22

Jacobs Solutions currently has a consensus target price of $153.70, indicating a potential upside of 11.03%. Genpact has a consensus target price of $39.33, indicating a potential upside of 18.77%. Given Genpact’s higher possible upside, analysts clearly believe Genpact is more favorable than Jacobs Solutions.

Volatility & Risk

Jacobs Solutions has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, Genpact has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500.

Valuation and Earnings

This table compares Jacobs Solutions and Genpact”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Jacobs Solutions	$12.03 billion	1.36	$289.34 million	$2.82	49.09
Genpact	$5.08 billion	1.10	$552.49 million	$3.37	9.83

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

Dividends

Jacobs Solutions pays an annual dividend of $1.44 per share and has a dividend yield of 1.0%. Genpact pays an annual dividend of $0.75 per share and has a dividend yield of 2.3%. Jacobs Solutions pays out 51.1% of its earnings in the form of a dividend. Genpact pays out 22.3% 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. Jacobs Solutions has increased its dividend for 4 consecutive years and Genpact has increased its dividend for 6 consecutive years. Genpact is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Jacobs Solutions and Genpact’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Jacobs Solutions	2.40%	23.96%	7.02%
Genpact	11.04%	23.34%	10.68%

Insider and Institutional Ownership

85.7% of Jacobs Solutions shares are owned by institutional investors. Comparatively, 96.0% of Genpact shares are owned by institutional investors. 0.5% of Jacobs Solutions shares are owned by insiders. Comparatively, 1.6% of Genpact shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Genpact beats Jacobs Solutions on 10 of the 17 factors compared between the two stocks.

About Jacobs Solutions

Jacobs Solutions Inc. provides consulting, technical, engineering, scientific, and project delivery services for the government and private sectors in the United States, Europe, Canada, India, Asia, Australia, New Zealand, the Middle East, and Africa. It operates through Critical Mission Solutions, People & Places Solutions, Divergent Solutions, and PA Consulting segments. The company offers cyber, data analytics, systems and software application integration and consulting, enterprise level and mission IT, design, nuclear, and enterprise level operations and maintenance services; software development, testing, mission integration, program management, research, development, test, evaluation services, training, and environmental remediation services; and other technical consulting solutions, as well as construction and construction management services. It also provides consulting services for consumer and manufacturing, defense and security, energy and utilities, financial services, government, health and life sciences, and transport industries. The company was founded in 1947 and is headquartered in Dallas, Texas.

About Genpact

Genpact Limited provides business process outsourcing and information technology services in India, rest of Asia, North and Latin America, and Europe. It operates through three segments: Financial services; Consumer and Healthcare; and High Tech and Manufacturing. The Financial Services segment offers retail customer onboarding, customer service, collections, card servicing operations, loan and payment operations, commercial loan, equipment and auto loan, mortgage origination, compliance services, reporting and monitoring, and wealth management operations support; financial crime and risk management services; and underwriting support, new business processing, policy administration, claims management, catastrophe modeling and actuarial services, as well as property and casualty claims. The Consumer and Healthcare segment provides demand generation, sensing and planning, supply chain planning and management, pricing and trade promotion management, deduction recovery management, order management, and digital commerce; and end-to-end claim lifecycle management, from claims processing and adjudication to claims recovery and payment integrity, revenue cycle management, health equity analytics, and care services. The High Tech and Manufacturing segment offers industry-specific solutions for trust and safety, advertising sales support, customer and user experience, and customer care support; and direct and indirect procurement, logistics, field, aftermarket support, and engineering services. It also provides digital operation services; data-tech-Al services; finance and accounting services, such as accounts payable, invoice-to-cash, record to report, financial planning and analysis, and enterprise risk and compliance; CFO advisory services; supply chain, and sourcing and procurement services; sales and commercial, and marketing and experience services; and environmental, social and governance services. The company was founded in 1997 and is based in Hamilton, Bermuda.