Comparing Convergys (CVG) and The Competition

Convergys (NYSE: CVG) is one of 39 public companies in the “Computer integrated systems design” industry, but how does it contrast to its competitors? We will compare Convergys to similar companies based on the strength of its profitability, risk, earnings, dividends, analyst recommendations, valuation and institutional ownership.

Profitability

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This table compares Convergys and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Convergys 4.35% 13.71% 7.78%
Convergys Competitors -3.00% -4.36% 0.76%

Valuation and Earnings

This table compares Convergys and its competitors gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Convergys $2.79 billion $121.40 million 12.73
Convergys Competitors $1.55 billion $74.13 million 21.89

Convergys has higher revenue and earnings than its competitors. Convergys is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Institutional & Insider Ownership

62.2% of shares of all “Computer integrated systems design” companies are owned by institutional investors. 1.7% of Convergys shares are owned by company insiders. Comparatively, 16.6% of shares of all “Computer integrated systems design” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Convergys and its competitors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Convergys 0 4 0 0 2.00
Convergys Competitors 244 1332 1925 41 2.50

Convergys presently has a consensus price target of $26.00, suggesting a potential upside of 9.20%. As a group, “Computer integrated systems design” companies have a potential upside of 9.80%. Given Convergys’ competitors stronger consensus rating and higher probable upside, analysts clearly believe Convergys has less favorable growth aspects than its competitors.

Risk and Volatility

Convergys has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500. Comparatively, Convergys’ competitors have a beta of -38.21, suggesting that their average share price is 3,921% less volatile than the S&P 500.

Dividends

Convergys pays an annual dividend of $0.40 per share and has a dividend yield of 1.7%. Convergys pays out 21.4% of its earnings in the form of a dividend. As a group, “Computer integrated systems design” companies pay a dividend yield of 1.3% and pay out 27.1% of their earnings in the form of a dividend. Convergys has increased its dividend for 5 consecutive years. Convergys is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Summary

Convergys beats its competitors on 8 of the 15 factors compared.

About Convergys

Convergys Corporation provides customer management services to communications and media, technology, financial services, retail, healthcare, government, travel and hospitality, and other vertical markets worldwide. The company offers solutions across the customer lifecycle, including sales, customer service, technical support, customer retention, and collection, as well as security, compliance, and fraud solutions; and solutions in contact center technology comprising omni-channel interaction, cross-channel integration framework, real-time decisioning engine, robotic process automation, intelligent notification, campaign management, personalized care, personalized selling, agent productivity, and retention solutions. It also provides analytics and consulting, and software solutions, such as enterprise feedback management, integrated customer experience analytics, post-contact surveys, relational loyalty research, customer segmentation and profiling, call elimination analysis, analysis of customer effort, digital channel optimization, and integrated contact center analytics solutions, as well as voice of customer software. The company operates through 140 contact centers. Convergys Corporation was founded in 1998 and is headquartered in Cincinnati, Ohio.

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