Reviewing Syntel (SYNT) and RealNetworks (RNWK)

Syntel (NASDAQ:SYNT) and RealNetworks (NASDAQ:RNWK) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

Institutional & Insider Ownership

40.8% of Syntel shares are held by institutional investors. Comparatively, 51.1% of RealNetworks shares are held by institutional investors. 58.1% of Syntel shares are held by company insiders. Comparatively, 39.5% of RealNetworks shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk & Volatility

Syntel has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500. Comparatively, RealNetworks has a beta of 0.24, meaning that its share price is 76% less volatile than the S&P 500.

Profitability

This table compares Syntel and RealNetworks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Syntel 18.42% 3,237.31% 38.35%
RealNetworks -18.52% -26.75% -18.60%

Valuation & Earnings

This table compares Syntel and RealNetworks’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Syntel $923.83 million 3.68 $166.26 million $2.02 20.27
RealNetworks $78.72 million 1.40 -$16.30 million N/A N/A

Syntel has higher revenue and earnings than RealNetworks.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Syntel and RealNetworks, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Syntel 2 10 0 0 1.83
RealNetworks 0 0 0 0 N/A

Syntel currently has a consensus price target of $27.29, suggesting a potential downside of 33.37%. Given Syntel’s higher probable upside, analysts clearly believe Syntel is more favorable than RealNetworks.

Summary

Syntel beats RealNetworks on 9 of the 10 factors compared between the two stocks.

About Syntel

Syntel, Inc. provides digital transformation, information technology (IT), and knowledge process outsourcing (KPO) services worldwide. The company operates through Banking and Financial Services; Healthcare and Life Sciences; Insurance; Manufacturing; and Retail, Logistics, and Telecom segments. It provides end-to-end, integrated application, and infrastructure management services; develops software applications; and offers legacy modernization services, such as software analysis, language conversion, reverse engineering, database migration, code optimization, cloud onboarding and migration, ecosystem migration, testing, and management. The company also provides consulting, implementation, and management services for enterprise architecture, data warehousing, business intelligence, and enterprise application integration, as well as mobility, big data, analytics, and Internet of Things technologies. In addition, it offers KPO services that provide outsourced solutions for knowledge and business processes. The company offers its products to various companies in the banking and financial services, healthcare and life sciences, insurance, manufacturing, retail, logistics, and telecom industries. Syntel, Inc. was founded in 1980 and is headquartered in Troy, Michigan.

About RealNetworks

RealNetworks, Inc. provides network-delivered digital media applications and services to manage, play, and share digital media. Its Consumer Media segment offers RealPlayer media player software, which enables consumers to discover, play, download, manage and edit digital video, stream audio and video, download and save photos and videos from the Web, transfer and share content on social networks, and edit their own photo and video content. This segment also licenses its technology to electronic equipment, microchip, and integrated circuit manufacturers. The company's Mobile Services segment provides digital media services to mobile and online service providers as software as a service offerings, which include RealTimes, a photo and video sharing platform, offers to wireless carriers for integration in their hosted cloud solutions; Kontxt, a text message management, anti-spam, and classification product; ringback tone that enables callers to hear subscriber-selected music or messages instead of the traditional electronic ringing; intercarrier messaging services; and business intelligence, and subscriber management and billing for the carriers. Its Games segment develops, publishes, and distributes casual games, including time-management, board, card, puzzle, word, and hidden-object games. It offers its casual games through mobile devices, digital downloads, and subscription play. The company also develops and markets software products and services that enable the creation, distribution, and consumption of digital media, including audio and video. The company provides its products and services through direct and indirect channels comprising public relations, trade shows, events, and speaking opportunities; online channels; third party distribution partners; and third-party distribution channels, such as application storefronts, search engines, online portals, and content publishers. RealNetworks, Inc. was founded in 1994 and is headquartered in Seattle, Washington.

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