Sykes Enterprises (NASDAQ: SYKE) and Altair Engineering (NASDAQ:ALTR) are both small-cap business services companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Profitability

This table compares Sykes Enterprises and Altair Engineering’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sykes Enterprises 4.32% 11.33% 6.81%
Altair Engineering N/A N/A N/A

Institutional and Insider Ownership

85.6% of Sykes Enterprises shares are held by institutional investors. 2.7% of Sykes Enterprises shares are held by insiders. Comparatively, 0.7% of Altair Engineering shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations for Sykes Enterprises and Altair Engineering, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sykes Enterprises 0 1 2 0 2.67
Altair Engineering 0 3 2 0 2.40

Sykes Enterprises currently has a consensus price target of $33.67, indicating a potential upside of 5.57%. Altair Engineering has a consensus price target of $26.00, indicating a potential upside of 0.46%. Given Sykes Enterprises’ stronger consensus rating and higher probable upside, equities analysts plainly believe Sykes Enterprises is more favorable than Altair Engineering.

Earnings and Valuation

This table compares Sykes Enterprises and Altair Engineering’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sykes Enterprises $1.46 billion 0.94 $62.39 million $1.61 19.81
Altair Engineering $313.24 million 5.20 $10.16 million N/A N/A

Sykes Enterprises has higher revenue and earnings than Altair Engineering.

Summary

Sykes Enterprises beats Altair Engineering on 9 of the 10 factors compared between the two stocks.

About Sykes Enterprises

Sykes Enterprises, Incorporated is engaged in providing outsourced customer contact management solutions and services in the business process outsourcing (BPO) arena on a global basis. The Company has operations in two segments: the Americas, which includes the United States, Canada, Latin America, Australia and the Asia Pacific Rim, and EMEA, which includes Europe, the Middle East and Africa. The Company provides its service to clients from its locations in the United States, Canada, Latin America, Australia, the Asia Pacific Rim, Europe and Africa. It serves a range of clients, including medium-sized businesses and public institutions, which span the communications, financial services, technology/consumer, transportation and leisure, healthcare and other industries. Its Americas and EMEA groups primarily provide customer engagement services. The Company’s outsourced customer contact management services include customer care, technical support and customer acquisition.

About Altair Engineering

Altair Engineering Inc. is a United States-based software company. The Company is focused on developing engineering software and computing technologies. The Company’s products include HyperWorks, solidThinking, PBS Works, and Carriots. The Company offers a range of solutions such as product engineering, industrial design, and tailored solutions. The Company provides open CAE software solutions for modeling, visualization, optimization and process automation. Altair’s grid computing software, PBS Pro, is a workload management solution for computing environments, LINUX clusters and desktop cycle harvesting.

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