UL Solutions (NYSE:ULS) & Concentrix (NASDAQ:CNXC) Financial Comparison

Concentrix (NASDAQ:CNXC) and UL Solutions (NYSE:ULS) are both business services companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, risk, valuation, earnings, analyst recommendations, institutional ownership and profitability.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Concentrix and UL Solutions, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Concentrix	1	1	3	0	2.40
UL Solutions	0	5	3	1	2.56

Concentrix presently has a consensus target price of $63.75, indicating a potential upside of 63.21%. UL Solutions has a consensus target price of $83.57, indicating a potential upside of 15.74%. Given Concentrix’s higher probable upside, equities analysts plainly believe Concentrix is more favorable than UL Solutions.

Institutional and Insider Ownership

90.3% of Concentrix shares are held by institutional investors. 3.2% of Concentrix shares are held by company insiders. Comparatively, 1.2% of UL Solutions shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Concentrix and UL Solutions”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Concentrix	$9.83 billion	0.24	-$1.28 billion	($20.84)	-1.87
UL Solutions	$2.87 billion	5.05	$326.00 million	$1.67	43.24

UL Solutions has lower revenue, but higher earnings than Concentrix. Concentrix is trading at a lower price-to-earnings ratio than UL Solutions, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Concentrix and UL Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Concentrix	-13.02%	16.91%	5.49%
UL Solutions	11.29%	34.49%	12.74%

Dividends

Concentrix pays an annual dividend of $1.44 per share and has a dividend yield of 3.7%. UL Solutions pays an annual dividend of $0.52 per share and has a dividend yield of 0.7%. Concentrix pays out -6.9% of its earnings in the form of a dividend. UL Solutions pays out 31.1% 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. Concentrix has increased its dividend for 3 consecutive years. Concentrix is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Concentrix has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500. Comparatively, UL Solutions has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500.

Summary

UL Solutions beats Concentrix on 10 of the 17 factors compared between the two stocks.

About Concentrix

Concentrix Corporation engages in the provision of technology-infused customer experience (CX) solutions worldwide. The company provides CX process optimization, technology innovation, front- and back-office automation, analytics, and business transformation services, across various channels of communication, such as voice, chat, email, social media, asynchronous messaging, and custom applications. It also offers customer lifecycle management; customer experience/user experience strategy and design; analytics and actionable insights; digital transformation services that design and engineer CX solutions to enable efficient customer self-service and build customer loyalty; customer engagement solutions and services that address the entirety of the customer lifecycle; AI technology that can intelligently act on customer intent to improve customer experience with non-human engagement; voice of the customer and analytics solutions to gather and analyze customer feedback to foster loyalty to, and growth with, clients; analytics and consulting solutions that synthesize data and provide professional insight to improve clients’ customer experience strategies; vertical business process outsourcing (BPO) services; and back office BPO services that support clients in non-customer facing areas. The company’s clients include technology and consumer electronics, retail, travel and e-commerce, communications and media, banking, financial services and insurance, healthcare, and others, as well as global IPOs, social brands, and banks. Concentrix Corporation was founded in 2004 and is based in Newark, California.

About UL Solutions

UL Solutions Inc. provides safety science services worldwide. It operates through three segments: Industrial, Consumer, and Software and Advisory. The Industrial segment provides testing, inspection, and certification services across various end markets, including energy, industrial automation, engineered materials, and built environment, as well as stakeholders, such as manufacturers, building owners, end users, and regulators. The Consumer segment offers safety certification testing, ongoing certification, global market access, testing for connectivity, performance and quality, and critical systems advisory and training services, as well as product market acceptance and risk mitigation services for customers in the consumer products end markets comprising consumer electronics, medical devices, information technologies, appliances, HVAC, lighting, and retail, as well as consumer applications, such as new mobility, smart products, and 5G. The Software and Advisory segment provide software and technical advisory services that enable customers to manage regulatory requirements, deliver supply chain transparency, and operationalize sustainability for regulated industries, including life sciences, supply chain regulations, transparency needs, and new ESG and sustainability requirements. It offers ULTRUS software brand to help customers improve speed to market, sustainability and safety. UL Solutions Inc. was formerly known as UL Inc. and changed its name to UL Solutions Inc. in June 2022. The company was founded in 1894 and is headquartered in Northbrook, Illinois with additional offices in North America, Asia Pacific, Africa, Europe, Latin America, and Middle East. UL Solutions Inc. operates as a subsidiary of ULSE Inc.