Accenture PLC (ACN) vs Cognizant Technology Solutions Corporation (CTSH)

Accenture PLC and Cognizant Technology Solutions Corporation are both Information Technology Services companies. Accenture PLC is the larger, with a market value of $109.3B against $25.6B — 4.3× the size. Cognizant Technology Solutions Corporation trades at the lower P/E: 12.3× against 14.0×. Accenture PLC grew revenue faster over the last twelve months: 6.74% against 5.64%. Accenture PLC has the higher net margin (10.7% vs 10.3%) and the higher return on invested capital (23.7% vs 14.4%). Both pay a dividend; Cognizant Technology Solutions Corporation yields more (1.57% vs 1.33%). Across the 23 metrics below, Cognizant Technology Solutions Corporation leads on 12 and Accenture PLC on 11.

Valuation

Metric ACN CTSH Information Technology Services median
P/E 13.95 12.28 14.63
P/S 1.47 1.23 1.13
P/B 3.27 1.84 2.10
Price to free cash flow 8.57 10.26 10.11
EV/EBITDA 7.84 6.79 8.56
EV/Sales 1.41 1.25 1.20
Earnings yield 7.17% 8.14% 4.56%
Free cash flow yield 11.67% 9.74% 4.37%

Profitability

Metric ACN CTSH Information Technology Services median
Gross margin 32.01% 33.44% 31.05%
Operating margin 14.49% 15.88% 3.30%
Net margin 10.66% 10.26% 2.09%
Free cash flow margin 17.21% 12.00% 0.00%
Return on equity 24.13% 14.92% 4.12%
Return on assets 11.79% 10.83% 0.61%
Return on invested capital 23.66% 14.38% 0.57%

Growth

Metric ACN CTSH Information Technology Services median
Revenue growth (TTM) 6.74% 5.64% 7.12%
EPS growth (last fiscal year) 6.21% 1.11% —
Revenue growth, 5-year CAGR 9.47% 4.86% 7.71%
Net income growth, 5-year CAGR 8.49% 9.88% 0.00%

Health

Metric ACN CTSH Information Technology Services median
Debt to equity 0.16 0.11 0.45
Current ratio 1.34 2.18 1.66
Net debt to EBITDA (0.50) (0.35) 0.44

Dividend

Metric ACN CTSH Information Technology Services median
Dividend yield 1.33% 1.57% 1.21%
Payout ratio 0.39 0.26 0.00

Size

Metric ACN CTSH Information Technology Services median
Market cap 109.34b 25.59b 1.36b

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