Head-To-Head Contrast: Genpact (G) vs. Brady (BRC)

Brady (NYSE: BRC) and Genpact (NYSE:G) are both industrial products companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Profitability

This table compares Brady and Genpact’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Brady 8.81% 13.90% 9.14%
Genpact 10.18% 23.86% 9.71%

Volatility and Risk

Brady has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500. Comparatively, Genpact has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500.

Insider & Institutional Ownership

77.1% of Brady shares are owned by institutional investors. Comparatively, 92.0% of Genpact shares are owned by institutional investors. 15.6% of Brady shares are owned by insiders. Comparatively, 1.4% of Genpact shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Brady and Genpact’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Brady $1.11 billion 1.66 $95.64 million $1.89 19.02
Genpact $2.57 billion 2.42 $269.68 million $1.38 23.36

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for Brady and Genpact, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brady 0 2 2 0 2.50
Genpact 0 2 6 0 2.75

Brady currently has a consensus price target of $40.50, suggesting a potential upside of 12.66%. Genpact has a consensus price target of $33.14, suggesting a potential upside of 2.80%. Given Brady’s higher possible upside, analysts plainly believe Brady is more favorable than Genpact.

Dividends

Brady pays an annual dividend of $0.83 per share and has a dividend yield of 2.3%. Genpact pays an annual dividend of $0.24 per share and has a dividend yield of 0.7%. Brady pays out 43.9% of its earnings in the form of a dividend. Genpact pays out 17.4% 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. Genpact has increased its dividend for 32 consecutive years.

Summary

Genpact beats Brady on 12 of the 17 factors compared between the two stocks.

About Brady

Brady Corporation is a manufacturer and supplier of identification solutions and workplace safety products that identify and protect premises, products and people. The Company has two segments: Identification Solutions (IDS) and Workplace Safety (WPS). The IDS segment includes identification and healthcare products, and the WPS segment includes workplace safety and compliance products. The IDS segment offers products that are manufactured under various brands, including the Brady brand, and are primarily sold through distribution to a range of maintenance, repair and operations (MRO) and original equipment manufacturing (OEM) customers, and through other channels. The WPS segment offers a range of product categories, such as safety and compliance signs, tags, and labels; informational and architectural signage; industrial warehouse and office equipment, and labor law compliance posters. Its brands include Electromark, Identicard, PromoVision, Scafftag, Seton and Emedco.

About Genpact

Genpact Limited is engaged in providing digitally powered business process management and services. The Company is also engaged in designing, transforming and running a combination of processes, as well as providing solutions that combine elements of its service offerings. The Company’s segments include Business process outsourcing and Information technology services. The Company offers various vertical activities, which include banking and financial services, capital markets, consumer product goods services, healthcare, infrastructure and manufacturing services, insurance and life sciences. In addition to these vertical activities, it also offers analytics and research, collections and customer services, consulting and transformation services, core industry operations services, enterprise application services, finance and accounting (F&A) services, information technology (IT) infrastructure management services, and supply chain and procurement services.

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