TeleTech (TTEC) and Its Competitors Critical Analysis

TeleTech (NASDAQ: TTEC) is one of 185 publicly-traded companies in the “IT Services & Consulting” industry, but how does it contrast to its peers? We will compare TeleTech to related companies based on the strength of its profitability, earnings, dividends, institutional ownership, analyst recommendations, valuation and risk.

Institutional and Insider Ownership

24.8% of TeleTech shares are held by institutional investors. Comparatively, 62.4% of shares of all “IT Services & Consulting” companies are held by institutional investors. 70.0% of TeleTech shares are held by company insiders. Comparatively, 16.5% of shares of all “IT Services & Consulting” companies 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.

Valuation and Earnings

This table compares TeleTech and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
TeleTech $1.28 billion $33.67 million 38.38
TeleTech Competitors $2.84 billion $293.55 million 348.59

TeleTech’s peers have higher revenue and earnings than TeleTech. TeleTech is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Dividends

TeleTech pays an annual dividend of $0.50 per share and has a dividend yield of 1.2%. TeleTech pays out 47.6% of its earnings in the form of a dividend. As a group, “IT Services & Consulting” companies pay a dividend yield of 1.5% and pay out 37.4% of their earnings in the form of a dividend. TeleTech lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Risk and Volatility

TeleTech has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500. Comparatively, TeleTech’s peers have a beta of 1.15, suggesting that their average stock price is 15% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for TeleTech and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TeleTech 0 1 0 0 2.00
TeleTech Competitors 832 4749 7542 182 2.53

TeleTech presently has a consensus target price of $43.00, indicating a potential upside of 6.70%. As a group, “IT Services & Consulting” companies have a potential downside of 10.97%. Given TeleTech’s higher possible upside, equities research analysts clearly believe TeleTech is more favorable than its peers.

Profitability

This table compares TeleTech and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TeleTech 3.45% 19.24% 8.26%
TeleTech Competitors -22.74% -276.16% -5.01%

Summary

TeleTech peers beat TeleTech on 10 of the 15 factors compared.

About TeleTech

TeleTech Holdings, Inc. (TeleTech) is a customer service provider that delivers consulting, technology, growth and customer care solutions on a global scale. The Company operates through four segments: Customer Management Services (CMS), Customer Growth Services (CGS), Customer Technology Services (CTS) and Customer Strategy Services (CSS). The CMS segment designs and manages clients’ front-to-back office processes to deliver just-in-time, personalized, multi-channel interactions. The CGS segment offers integrated sales and marketing solutions to help its clients in the business-to-consumer or business-to-business markets. The CTS segment includes operational and system design consulting, customer experience technology product, implementation and integration consulting services, and management of clients cloud and on premise solutions. The CSS segment provides professional services in customer experience strategy, and system and operational process optimization.

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