Jack Henry & Associates (NASDAQ:JKHY) & Cognizant Technology Solutions (NASDAQ:CTSH) Head to Head Analysis

Jack Henry & Associates (NASDAQ:JKHY) and Cognizant Technology Solutions (NASDAQ:CTSH) are both large-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, risk, earnings and dividends.

Profitability

This table compares Jack Henry & Associates and Cognizant Technology Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Jack Henry & Associates	19.86%	23.11%	16.10%
Cognizant Technology Solutions	10.20%	17.00%	12.61%

Earnings & Valuation

This table compares Jack Henry & Associates and Cognizant Technology Solutions”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Jack Henry & Associates	$2.38 billion	5.46	$455.75 million	$6.58	27.23
Cognizant Technology Solutions	$20.86 billion	1.92	$2.24 billion	$4.31	19.24

Cognizant Technology Solutions has higher revenue and earnings than Jack Henry & Associates. Cognizant Technology Solutions is trading at a lower price-to-earnings ratio than Jack Henry & Associates, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

98.8% of Jack Henry & Associates shares are held by institutional investors. Comparatively, 92.4% of Cognizant Technology Solutions shares are held by institutional investors. 0.6% of Jack Henry & Associates shares are held by company insiders. Comparatively, 0.3% of Cognizant Technology Solutions shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Jack Henry & Associates pays an annual dividend of $2.32 per share and has a dividend yield of 1.3%. Cognizant Technology Solutions pays an annual dividend of $1.24 per share and has a dividend yield of 1.5%. Jack Henry & Associates pays out 35.3% of its earnings in the form of a dividend. Cognizant Technology Solutions pays out 28.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Jack Henry & Associates has increased its dividend for 35 consecutive years and Cognizant Technology Solutions has increased its dividend for 6 consecutive years. Cognizant Technology Solutions is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Jack Henry & Associates and Cognizant Technology Solutions, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Jack Henry & Associates	0	6	6	1	2.62
Cognizant Technology Solutions	0	12	9	0	2.43

Jack Henry & Associates presently has a consensus target price of $199.73, suggesting a potential upside of 11.47%. Cognizant Technology Solutions has a consensus target price of $90.28, suggesting a potential upside of 8.89%. Given Jack Henry & Associates’ stronger consensus rating and higher probable upside, analysts clearly believe Jack Henry & Associates is more favorable than Cognizant Technology Solutions.

Volatility and Risk

Jack Henry & Associates has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500. Comparatively, Cognizant Technology Solutions has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.

Summary

Jack Henry & Associates beats Cognizant Technology Solutions on 12 of the 18 factors compared between the two stocks.

About Jack Henry & Associates

Jack Henry & Associates, Inc. is a financial technology company, which engages in the provision of technology solutions and payment processing services. It operates through the following segments: Core, Payments, Complementary, and Corporate and Other. The Core segment provides core information processing platforms to banks and credit unions which consist of integrated applications required to process deposit, loan, and general ledger transactions, and maintain centralized customer and member information. The Payments segment includes secure payment processing tools and services including ATM, debit, and credit card processing services, online and mobile bill pay solutions, ACH origination and remote deposit capture processing, and risk management products and services. The Complementary segment focuses on additional software, hosted processing platforms, and services including call center support, network security management, consulting, and monitoring. The Corporate and Other segment offers hardware and other products. The company was founded by Jerry D. Hall and John W. Henry in 1976 and is headquartered in Monett, MO.

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.