Head-To-Head Survey: DXC Technology (CSC) versus CSG Systems International (CSGS)

DXC Technology (NYSE: CSC) and CSG Systems International (NASDAQ:CSGS) are both technology companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, valuation, analyst recommendations, risk, earnings, dividends and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for DXC Technology and CSG Systems International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DXC Technology 0 3 3 0 2.50
CSG Systems International 0 0 1 0 3.00

DXC Technology currently has a consensus target price of $78.67, suggesting a potential upside of 13.99%. CSG Systems International has a consensus target price of $47.00, suggesting a potential upside of 2.89%. Given DXC Technology’s higher probable upside, analysts plainly believe DXC Technology is more favorable than CSG Systems International.

Earnings and Valuation

This table compares DXC Technology and CSG Systems International’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
DXC Technology N/A N/A N/A ($0.34) -202.97
CSG Systems International $760.96 million 2.01 $62.88 million $1.79 25.52

CSG Systems International has higher revenue and earnings than DXC Technology. DXC Technology is trading at a lower price-to-earnings ratio than CSG Systems International, indicating that it is currently the more affordable of the two stocks.

Dividends

DXC Technology pays an annual dividend of $0.56 per share and has a dividend yield of 0.8%. CSG Systems International pays an annual dividend of $0.79 per share and has a dividend yield of 1.7%. DXC Technology pays out -164.7% of its earnings in the form of a dividend. CSG Systems International pays out 44.1% 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.

Insider and Institutional Ownership

97.8% of DXC Technology shares are held by institutional investors. Comparatively, 91.3% of CSG Systems International shares are held by institutional investors. 1.5% of DXC Technology shares are held by company insiders. Comparatively, 2.6% of CSG Systems International shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares DXC Technology and CSG Systems International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DXC Technology 4.30% 8.51% 3.30%
CSG Systems International 7.57% 22.11% 7.58%

Summary

CSG Systems International beats DXC Technology on 9 of the 13 factors compared between the two stocks.

About DXC Technology

DXC Technology Company provides digital information technology (IT) services and solutions. The Company provides a range of services, including analytics, applications, business process, cloud and workload, consulting, enterprise and cloud applications, security, and workplace and mobility. The Company offers a portfolio of analytics services, to provide insights and accelerate users’ digital transformation. Its analytics services and solutions include Data Discovery Experience, Data Workload Optimization and Managed Business Intelligence Services. The Company addresses analytic solution needs to run the business, including customer analytic services, warranty analytics, predictive maintenance analytics, social intelligence analytics, healthcare analytics, insurance analytics, data pipeline and operations, banking analytics, airline analytics and operational analytics. The Company also offers e-commerce, finance and administration products and services.

About CSG Systems International

CSG Systems International, Inc. (CSG) is a provider of business support solutions primarily serving the communications industry. The Company provides business support solutions (BSS) to the communications service providers (CSPs), as well as clients in various industries. CSG’s solutions coordinate and manage various aspects of a service provider’s customer interactions, from the initial activation of customer accounts, to the support and fulfillment of various services, and through the calculation, presentment, and accounts receivables management of monthly customer statements. The Company’s primary product solutions include Revenue Management & Customer Experience Solutions; Customer Interaction Management; Managed Services; Mediation and Data Management, and Wholesale Settlement and Routing. The Company employs professional services across various sectors, including solution architecture, project management, systems implementation and business consultancy.

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