Head-To-Head Contrast: Leidos (NYSE:LDOS) & Wipro (NYSE:WIT)

Wipro (NYSE:WIT) and Leidos (NYSE:LDOS) are both large-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, profitability, valuation and earnings.

Profitability

This table compares Wipro and Leidos’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wipro	14.61%	15.35%	10.00%
Leidos	8.43%	32.95%	11.60%

Insider & Institutional Ownership

2.4% of Wipro shares are held by institutional investors. Comparatively, 76.1% of Leidos shares are held by institutional investors. 1.0% of Wipro shares are held by insiders. Comparatively, 0.7% of Leidos 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.

Earnings and Valuation

This table compares Wipro and Leidos”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wipro	$10.43 billion	2.17	$1.54 billion	$0.14	15.46
Leidos	$17.17 billion	1.20	$1.45 billion	$11.13	14.62

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

Risk & Volatility

Wipro has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500. Comparatively, Leidos has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500.

Dividends

Wipro pays an annual dividend of $0.12 per share and has a dividend yield of 5.5%. Leidos pays an annual dividend of $1.72 per share and has a dividend yield of 1.1%. Wipro pays out 85.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Leidos pays out 15.5% of its earnings in the form of a dividend. Leidos has raised its dividend for 6 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Wipro and Leidos, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wipro	2	2	0	0	1.50
Leidos	0	4	9	0	2.69

Leidos has a consensus target price of $214.18, suggesting a potential upside of 31.61%. Given Leidos’ stronger consensus rating and higher probable upside, analysts plainly believe Leidos is more favorable than Wipro.

Summary

Leidos beats Wipro on 10 of the 17 factors compared between the two stocks.

About Wipro

Wipro Limited operates as an information technology (IT), consulting, and business process services company worldwide. It operates through IT Services and IT Products segments. The IT Services segment offers IT and IT-enabled services, including digital strategy advisory, customer-centric design, technology and IT consulting, custom application design, development, re-engineering and maintenance, systems integration, package implementation, cloud and infrastructure, business process, cloud, mobility and analytics, research and development, and hardware and software design services to enterprises. It serves customers in various industry sectors, such as communications, retail connectivity and services, consumer goods, healthcare, technology products and platforms, banking and financial services, energy, manufacturing and resources, capital markets and insurance, and hi-tech. The IT Products segment provides a range of 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. It serves enterprises in various industries primarily in the Indian market, which comprise the government, defense, IT and IT-enabled services, telecommunications, manufacturing, utilities, education, and financial services sectors. The company was incorporated in 1945 and is based in Bengaluru, India.

About Leidos

Leidos Holdings, Inc., together with its subsidiaries, provides services and solutions in the defense, intelligence, civil, and health markets in the United States and internationally. The company operates through Defense Solutions, Civil, and Health segments. The Defense Solutions segment offers national security solutions and systems for air, land, sea, space, and cyberspace for the U.S. Intelligence Community, the Department of Defense, the space development agency, the National Aeronautics and Space Administration, defense information systems agency, military services, and government agencies of U.S. allies abroad, as well as other federal and commercial customers in the national security industry. The solutions include technology, large-scale systems, command and control platforms, data analytics, logistics, and cybersecurity solutions, as well as intelligence analysis and operations support services to critical missions. The Civil segment provides systems integration services to air navigation service providers, including the federal aviation administration, the En route automation modernization, advanced technology oceanic procedure, time based flow management, terminal flight data management, geo-7, and future flight services, as well as enterprise-information display systems; and security detection services. It also offers information technology (IT) solutions in cloud computing, mobility, application modernization, DevOps, data center, network modernization, asset management, help desk operations, and digital workplace enablement; and environment, energy, and infrastructure services. The Health segment offers solutions to federal and commercial customers responsible for health and well-being of people, include health information management, managed health, digital modernization, and life sciences research and development services. Leidos Holdings, Inc. was founded in 1969 and is headquartered in Reston, Virginia.