WNS (Holdings) Limited (NYSE: WNS) and StarTek (NYSE:SRT) are both small-cap business services companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, valuation, profitabiliy, institutional ownership, analyst recommendations, risk and dividends.
Insider & Institutional Ownership
88.5% of WNS (Holdings) Limited shares are held by institutional investors. Comparatively, 45.4% of StarTek shares are held by institutional investors. 17.8% of StarTek shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares WNS (Holdings) Limited and StarTek’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|WNS (Holdings) Limited||$602.50 million||2.70||$90.18 million||$0.72||45.18|
|StarTek||$306.82 million||0.58||$16.73 million||$0.12||93.50|
WNS (Holdings) Limited has higher revenue and earnings than StarTek. WNS (Holdings) Limited is trading at a lower price-to-earnings ratio than StarTek, indicating that it is currently the more affordable of the two stocks.
This table compares WNS (Holdings) Limited and StarTek’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|WNS (Holdings) Limited||6.27%||19.10%||13.53%|
Volatility and Risk
WNS (Holdings) Limited has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500. Comparatively, StarTek has a beta of -0.13, meaning that its share price is 113% less volatile than the S&P 500.
This is a breakdown of recent recommendations and price targets for WNS (Holdings) Limited and StarTek, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|WNS (Holdings) Limited||0||0||10||0||3.00|
WNS (Holdings) Limited presently has a consensus target price of $35.14, indicating a potential upside of 8.03%. StarTek has a consensus target price of $10.00, indicating a potential downside of 10.87%. Given WNS (Holdings) Limited’s higher probable upside, equities research analysts plainly believe WNS (Holdings) Limited is more favorable than StarTek.
WNS (Holdings) Limited beats StarTek on 11 of the 13 factors compared between the two stocks.
WNS (Holdings) Limited Company Profile
WNS (Holdings) Limited is a global provider of business process management (BPM) services. The Company offers data, voice, analytical and business transformation services. The Company’s segments include WNS Global BPM and WNS Auto Claims BPM. Its operating segments include travel, insurance, banking and financial services, healthcare, utilities, retail and consumer products groups, auto claims and others. The WNS Global BPM includes the Company’s business activities with the exception of WNS Auto Claims BPM. WNS Auto Claims BPM is the Company’s automobile claims management business. The Company focuses on various industry verticals, such as insurance; travel and leisure; diversified businesses, including manufacturing, retail, consumer packaged goods (CPG), media and entertainment, and telecommunication (telecom); utilities; consulting and professional services; banking and financial services; healthcare, and shipping and logistics.
StarTek Company Profile
StarTek, Inc. is a customer engagement business process outsourcing (BPO) services provider, delivering customer care solutions. The Company operates through three segments: Domestic, Nearshore and Offshore. As of December 31, 2016, its Domestic segment included the operations of 13 facilities in the United States and one facility in Canada; its Offshore segment included the operations of four facilities in the Philippines, and its Nearshore segment included the operations of two facilities in Honduras and one facility in Jamaica. The Company’s service offerings include customer care, sales support, inbound sales, complex order processing, accounts receivable management, technical and product support, up-sell and cross-sell opportunities, customer intelligence analytics and other industry-specific processes. Its suite of order processing services ranges from enterprise level project management to direct-to-consumer order processing.
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