NEC (OTCMKTS:NIPNF – Get Free Report) and Cognizant Technology Solutions (NASDAQ:CTSH – Get Free Report) are both technology companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, dividends, earnings, institutional ownership and valuation.
Risk and Volatility
NEC has a beta of -0.47, meaning that its stock price is 147% less volatile than the S&P 500. Comparatively, Cognizant Technology Solutions has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent ratings for NEC and Cognizant Technology Solutions, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| NEC | 0 | 0 | 1 | 0 | 3.00 |
| Cognizant Technology Solutions | 1 | 13 | 10 | 0 | 2.38 |
Insider & Institutional Ownership
92.4% of Cognizant Technology Solutions shares are owned by institutional investors. 0.4% of Cognizant Technology Solutions shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Profitability
This table compares NEC and Cognizant Technology Solutions’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| NEC | N/A | N/A | N/A |
| Cognizant Technology Solutions | 10.26% | 17.70% | 12.81% |
Valuation and Earnings
This table compares NEC and Cognizant Technology Solutions”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| NEC | $25.69 billion | 0.32 | $412.83 million | $1.64 | 19.06 |
| Cognizant Technology Solutions | $21.11 billion | 1.25 | $2.23 billion | $4.65 | 12.62 |
Cognizant Technology Solutions has lower revenue, but higher earnings than NEC. Cognizant Technology Solutions is trading at a lower price-to-earnings ratio than NEC, indicating that it is currently the more affordable of the two stocks.
Summary
Cognizant Technology Solutions beats NEC on 11 of the 14 factors compared between the two stocks.
About NEC
NEC Corporation provides information and communication technology solutions in Japan and internationally. It operates through five segments: Public Solutions Business, Public Infrastructure Business, Enterprise Business, Network Services Business, and Global Business. It provides systems integration services, including systems implementation and consulting; maintenance and support services; outsourcing and cloud services; and system equipment. The company also offers network infrastructure products comprising core network equipment, mobile phone base stations, optical transmission systems, and routers and switches; and services and management solutions, such as operation support system (OSS), business support system (BSS), and services. In addition, it provides digital government and digital finance solutions; software services for service providers, including OSS/BSS; and network infrastructure comprising submarine systems and wireless backhaul. Further, the company offers business computers, servers, NEC HPC solutions, and thin client solutions; data storage solutions; embedded systems; fiber optic devices; CONNEXIVE, an IoT platform software; PASOLINK, a mobile backhaul; optical fiber sensing products; submarine systems; and open optical transport products. Additionally, it provides EXPRESSCLUSTER X, a BC/DR solutions; NIAS, a solution for file server management; ERP solutions; MasterScope, an integrated administration software suite; Obbligato, a product lifecycle management; SaaS Solutions; WebOTX, a service execution platform; and unified communications and collaboration solutions. It serves aerospace, agriculture, aviation, broadcasting, finance, government, healthcare, hospitality, logistics, manufacturing, retail, telecom, and transportation industries. The company was formerly known as Nippon Electric Company, Limited and changed its name to NEC Corporation in April 1983. NEC Corporation was incorporated in 1899 and is headquartered in Tokyo, Japan.
About Cognizant Technology Solutions
Cognizant Technology Solutions Corporation, a professional services company, provides consulting and technology, and outsourcing services in North America, Europe, and internationally. It operates through four segments: Financial Services, Health Sciences, Products and Resources, and Communications, Media and Technology. The company provides customer experience, robotic process automation, analytics, and AI services in areas, such as digital lending, fraud detection, and next generation payments; the shift towards consumerism, outcome-based contracting, digital health, delivering integrated seamless, omni-channel, and patient-centered experience; and services that drive operational improvements in areas, such as clinical development, pharmacovigilance, and manufacturing, as well as claims processing, enrollment, membership, and billing to healthcare providers and payers, and life sciences companies, including pharmaceutical, biotech, and medical device companies. It offers solution to manufacturers, automakers, retailers and travel and hospitality companies, as well as companies providing logistics, energy and utility services; and digital content, business process improvement, technology modernization, and the creation of unified and compelling user experience services to communications, media and entertainment, education, and information services and technology companies. The company was incorporated in 1988 and is headquartered in Teaneck, New Jersey.
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