Head-To-Head Review: Convergys (CVG) and Agilysys (AGYS)

Agilysys (NASDAQ: AGYS) and Convergys (NYSE:CVG) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.

Valuation & Earnings

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This table compares Agilysys and Convergys’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Agilysys $127.68 million 2.25 -$11.72 million N/A N/A
Convergys $2.79 billion 0.78 $121.40 million $1.87 12.68

Convergys has higher revenue and earnings than Agilysys.

Dividends

Convergys pays an annual dividend of $0.40 per share and has a dividend yield of 1.7%. Agilysys does not pay a dividend. Convergys pays out 21.4% of its earnings in the form of a dividend. Convergys has increased its dividend for 5 consecutive years.

Profitability

This table compares Agilysys and Convergys’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Agilysys -10.66% -12.12% -8.35%
Convergys 4.35% 13.71% 7.78%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Agilysys and Convergys, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Agilysys 0 0 0 0 N/A
Convergys 0 4 0 0 2.00

Convergys has a consensus price target of $26.00, suggesting a potential upside of 9.61%. Given Convergys’ higher possible upside, analysts clearly believe Convergys is more favorable than Agilysys.

Insider and Institutional Ownership

84.5% of Agilysys shares are held by institutional investors. 34.7% of Agilysys shares are held by company insiders. Comparatively, 1.7% of Convergys shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Agilysys has a beta of 0.31, indicating that its share price is 69% less volatile than the S&P 500. Comparatively, Convergys has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500.

Summary

Convergys beats Agilysys on 9 of the 13 factors compared between the two stocks.

Agilysys Company Profile

Agilysys, Inc., together with its subsidiaries, operates as a developer and marketer of hardware and software products and services to the hospitality industry in North America, Europe, and Asia. It specializes in point-of-sale, property management, inventory and procurement, workforce management, and mobile and wireless solutions that are designed to streamline operations, enhance efficiency, increasing guest recruitment and wallet share, and enhance the overall guest experience. The company also offers support and maintenance of software and hardware products, and subscription services; and professional services. It serves various sectors, including gaming; hotels, resorts, and cruise; foodservice management; and restaurants, universities, stadia, and healthcare. The company was formerly known as Pioneer-Standard Electronics, Inc. and changed its name to Agilysys, Inc. in 2003. Agilysys, Inc. was founded in 1963 and is based in Alpharetta, Georgia.

Convergys Company Profile

Convergys Corporation provides customer management services to communications and media, technology, financial services, retail, healthcare, government, travel and hospitality, and other vertical markets worldwide. The company offers solutions across the customer lifecycle, including sales, customer service, technical support, customer retention, and collection, as well as security, compliance, and fraud solutions; and solutions in contact center technology comprising omni-channel interaction, cross-channel integration framework, real-time decisioning engine, robotic process automation, intelligent notification, campaign management, personalized care, personalized selling, agent productivity, and retention solutions. It also provides analytics and consulting, and software solutions, such as enterprise feedback management, integrated customer experience analytics, post-contact surveys, relational loyalty research, customer segmentation and profiling, call elimination analysis, analysis of customer effort, digital channel optimization, and integrated contact center analytics solutions, as well as voice of customer software. The company operates through 140 contact centers. Convergys Corporation was founded in 1998 and is headquartered in Cincinnati, Ohio.

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