Critical Analysis: NTT DATA Corp/ADR (NTDTY) & Syntel (SYNT)

NTT DATA Corp/ADR (OTCMKTS:NTDTY) and Syntel (NASDAQ:SYNT) are both business services companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, dividends, risk and profitability.

Risk and Volatility

NTT DATA Corp/ADR has a beta of 3.25, indicating that its stock price is 225% more volatile than the S&P 500. Comparatively, Syntel has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500.

Profitability

This table compares NTT DATA Corp/ADR and Syntel’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NTT DATA Corp/ADR 2.76% 8.76% 3.44%
Syntel 18.42% 3,237.31% 38.35%

Earnings & Valuation

This table compares NTT DATA Corp/ADR and Syntel’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NTT DATA Corp/ADR $19.12 billion 1.02 $523.55 million $0.51 27.29
Syntel $923.83 million 3.68 $166.26 million $2.02 20.27

NTT DATA Corp/ADR has higher revenue and earnings than Syntel. Syntel is trading at a lower price-to-earnings ratio than NTT DATA Corp/ADR, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

40.8% of Syntel shares are owned by institutional investors. 58.1% of Syntel shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

NTT DATA Corp/ADR pays an annual dividend of $0.09 per share and has a dividend yield of 0.6%. Syntel does not pay a dividend. NTT DATA Corp/ADR pays out 17.6% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current recommendations for NTT DATA Corp/ADR and Syntel, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NTT DATA Corp/ADR 0 0 0 0 N/A
Syntel 2 10 0 0 1.83

Syntel 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 NTT DATA Corp/ADR.

Summary

Syntel beats NTT DATA Corp/ADR on 9 of the 14 factors compared between the two stocks.

About NTT DATA Corp/ADR

NTT DATA Corporation provides consulting, system development, and business information technology (IT) outsourcing services worldwide. The company operates through four segments: Public & Social Infrastructure, Financial, Enterprise & Solutions, and Global. It offers business consulting services, such as business strategy, business process optimization, and organizational change management; and IT consulting services, including IT strategy and governance, information and knowledge management, and program management office consulting services. The company also provides architecture strategy and design, application development and system integration, quality assurance and testing, application management and outsourcing, legacy modernization, mobility, and online services; embedded and real-time systems; and application development technologies. In addition, it offers enterprise application services comprising SAP, Oracle, and Microsoft application services; and enterprise resource planning, customer relationship management, supply chain management, business intelligence, and enterprise portal solutions. Further, the company provides business intelligence; analytics, predictive analytics, and data mining; enterprise performance management; big data; governance, risk, and compliance; information management; and data warehousing and data management services. Additionally, it offers infrastructure services, which include data center, IT security, application hosting, network, service desk support, contact center management, remote infrastructure management, and desktop services; and business process and infrastructure management outsourcing services. The company was formerly known as NTT Data Communications Systems Corporation and changed its name to NTT DATA Corporation in 1996. NTT DATA Corporation was founded in 1967 and is headquartered in Tokyo, Japan. NTT DATA Corporation is a subsidiary of Nippon Telegraph and Telephone Corporation.

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.

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