Comparing Accenture (NYSE:ACN) & Leidos (NYSE:LDOS)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Accenture	10.61%	26.33%	12.94%
Leidos	8.15%	31.92%	11.23%

Earnings and Valuation

This table compares Accenture and Leidos”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Accenture	$72.11 billion	1.81	$7.68 billion	$12.21	16.10
Leidos	$17.17 billion	0.94	$1.45 billion	$10.92	11.72

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

Insider and Institutional Ownership

75.1% of Accenture shares are owned by institutional investors. Comparatively, 76.1% of Leidos shares are owned by institutional investors. 0.0% of Accenture shares are owned by company insiders. Comparatively, 0.8% of Leidos shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility and Risk

Accenture has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, Leidos has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500.

Dividends

Accenture pays an annual dividend of $6.52 per share and has a dividend yield of 3.3%. Leidos pays an annual dividend of $1.72 per share and has a dividend yield of 1.3%. Accenture pays out 53.4% of its earnings in the form of a dividend. Leidos pays out 15.8% 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. Accenture has increased its dividend for 20 consecutive years and Leidos has increased its dividend for 6 consecutive years. Accenture is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Accenture and Leidos, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Accenture	0	11	16	0	2.59
Leidos	0	6	7	1	2.64

Accenture presently has a consensus target price of $271.81, suggesting a potential upside of 38.30%. Leidos has a consensus target price of $191.25, suggesting a potential upside of 49.47%. Given Leidos’ stronger consensus rating and higher possible upside, analysts plainly believe Leidos is more favorable than Accenture.

Summary

Accenture beats Leidos on 11 of the 18 factors compared between the two stocks.

About Accenture

Accenture plc, a professional services company, provides strategy and consulting, industry X, song, and technology and operation services worldwide. The company offers application services, including agile transformation, DevOps, application modernization, enterprise architecture, software and quality engineering, data management; intelligent automation comprising robotic process automation, natural language processing, and virtual agents; and application management services, as well as software engineering services; strategy and consulting services; data and analytics strategy, data discovery and augmentation, data management and beyond, data democratization, and industrialized solutions comprising turnkey analytics and artificial intelligence (AI) solutions; metaverse; and sustainability services. It also provides change management, HR transformation and delivery, organization strategy and design, talent strategy and development, and leadership and culture services; digital commerce; infrastructure services, including cloud infrastructure managed, cloud and data center, network, digital workplace, database platforms, service management, and cloud and infrastructure security services; data-enabled operating models; technology consulting and AI services; and technology consulting services. In addition, the company offers engineering and R&D digitization, smart connected products, product as-a-service enablement, capital projects, intelligent asset management, digital industrial workforce, and autonomous robotic systems; business process outsourcing; and services related to technology innovation. Further, it provides cloud, ecosystem, marketing, security, supply chain management, zero-based transformation, customer experience, finance consulting, mergers and acquisitions, and sustainability services. The company has a collaboration with Salesforce, Inc. to develop Salesforce Life Sciences Cloud. The company was founded in 1951 and is based in Dublin, Ireland.

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.