CA (NASDAQ: CA) and GDS (NASDAQ:GDS) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, risk, dividends, institutional ownership and profitability.

Insider and Institutional Ownership

69.1% of CA shares are held by institutional investors. Comparatively, 17.4% of GDS shares are held by institutional investors. 0.9% of CA shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

CA pays an annual dividend of $1.02 per share and has a dividend yield of 3.1%. GDS does not pay a dividend. CA pays out 58.6% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current ratings and price targets for CA and GDS, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CA 3 9 4 0 2.06
GDS 0 0 1 0 3.00

CA currently has a consensus price target of $33.44, suggesting a potential upside of 0.82%. GDS has a consensus price target of $14.00, suggesting a potential downside of 23.12%. Given CA’s higher probable upside, analysts plainly believe CA is more favorable than GDS.

Earnings & Valuation

This table compares CA and GDS’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CA $4.04 billion 3.44 $775.00 million $1.74 19.06
GDS $152.09 million 11.66 -$41.60 million ($0.56) -32.52

CA has higher revenue and earnings than GDS. GDS is trading at a lower price-to-earnings ratio than CA, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares CA and GDS’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CA 17.83% 15.74% 7.50%
GDS -19.71% -9.54% -3.04%

Summary

CA beats GDS on 11 of the 14 factors compared between the two stocks.

About CA

CA, Inc. (CA) is engaged in providing software solutions enabling customers to plan, develop, manage and secure applications and enterprise environments across distributed, cloud, mobile and mainframe platforms. The Company operates through three business segments: Mainframe Solutions, Enterprise Solutions and Services. Its Mainframe Solutions and Enterprise Solutions segments comprise the Company’s software business organized by the nature of its software offerings and the platform on which the products operate. The Services segment comprises product implementation, consulting, customer education, customer training and application management services. CA’s Mainframe Solutions segment consists of various product offerings, including Application Development, Databases and Database Management, Security & Compliance, and Systems and Operations Management. The Enterprise Solutions segment consists of various product offerings, including Agile Management, DevOps and Security.

About GDS

GDS Holdings Ltd is a developer and operator of data centers in China. The Company is engaged in design, build-out and operation of data centers. It operates as a carrier and cloud neutral, which enables its customers to connect to all the People’s Republic of China telecommunications carriers, and to access a number of the People’s Republic of China cloud service providers, whom it hosts in its facilities. The Company’s base of approximately 370 customers consists of Internet companies, financial institutions, telecommunications and information technology (IT) service providers, and domestic private sector and multinational corporations. It serves a community of approximately 160 People’s Republic of China and foreign financial institutions across the banking, insurance, asset management, brokerage, digital payment and financial information verticals. The Company operates its data centers in Shanghai, Beijing, Shenzhen, Guangzhou and Chengdu.

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