Alliance Data Systems (NYSE:ADS) versus WNS (NYSE:WNS) Head-To-Head Contrast

Alliance Data Systems (NYSE:ADS) and WNS (NYSE:WNS) are both mid-cap business services companies, but which is the better business? We will contrast the two companies based on the strength of their risk, institutional ownership, earnings, dividends, valuation, analyst recommendations and profitability.

Institutional and Insider Ownership

91.0% of Alliance Data Systems shares are owned by institutional investors. Comparatively, 95.2% of WNS shares are owned by institutional investors. 2.8% of Alliance Data Systems shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Alliance Data Systems and WNS’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Alliance Data Systems $5.58 billion 0.36 $278.00 million $16.39 2.57
WNS $928.30 million 2.24 $116.77 million $2.54 16.43

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

Volatility & Risk

Alliance Data Systems has a beta of 2.58, meaning that its share price is 158% more volatile than the S&P 500. Comparatively, WNS has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500.

Profitability

This table compares Alliance Data Systems and WNS’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alliance Data Systems 3.41% 40.98% 2.48%
WNS 12.57% 23.45% 13.40%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Alliance Data Systems and WNS, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alliance Data Systems 1 9 7 0 2.35
WNS 0 1 10 0 2.91

Alliance Data Systems presently has a consensus target price of $95.71, suggesting a potential upside of 127.62%. WNS has a consensus target price of $59.70, suggesting a potential upside of 43.06%. Given Alliance Data Systems’ higher probable upside, research analysts plainly believe Alliance Data Systems is more favorable than WNS.

About Alliance Data Systems

Alliance Data Systems Corporation provides data-driven marketing and loyalty solutions worldwide. It operates through three segments: LoyaltyOne, Epsilon, and Card Services. The company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. It also focuses on facilitating and managing interactions between its clients and their customers through various consumer marketing channels, including in-store, online, email, social media, mobile, direct mail, and telephone. The company captures and analyzes data created during each customer interaction, leveraging the insight derived from that data to enable clients to identify and acquire new customers and to enhance customer loyalty. It serves clients across various end-markets, including financial services, specialty retail, grocery and drugstore chains, petroleum retail, automotive, hospitality and travel, telecommunications, insurance, and healthcare. Alliance Data Systems Corporation was founded in 1996 and is headquartered in Plano, Texas.

About WNS

WNS (Holdings) Limited, a business process management company, together with its subsidiaries, provides data, voice, analytical, and business transformation services worldwide. It operates through two segments, WNS Global BPM and WNS Auto Claims BPM. The company offers industry-specific services to clients primarily in insurance; travel and leisure; diversified businesses, including manufacturing, retail, consumer packaged goods, media and entertainment, and telecommunication; utilities; consulting and professional services; healthcare; banking and financial services; and shipping and logistics industries. It also provides shared services, such as customer interaction, finance and accounting, research and analytics, technology, legal, and human resources outsourcing services. In addition, the company offers transformation services designed to help its clients to modify their business processes to enhance productivity, as well as manage changes in the business environment and leverage business knowledge to increase market competitiveness. Further, it provides claims handling and repair management services for automobile repairs through a network of third party repair centers; and a suite of accident management services, such as credit hire and credit repair. WNS (Holdings) Limited was founded in 1996 and is based in Mumbai, India.

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