Kyndryl (NYSE:KD – Get Free Report) and Open Text (NASDAQ:OTEX – Get Free Report) are both mid-cap business services companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.
Volatility and Risk
Kyndryl has a beta of 1.63, suggesting that its share price is 63% more volatile than the S&P 500. Comparatively, Open Text has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current ratings and target prices for Kyndryl and Open Text, as provided by MarketBeat.com.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
Kyndryl | 0 | 0 | 6 | 0 | 3.00 |
Open Text | 0 | 8 | 3 | 0 | 2.27 |
Institutional & Insider Ownership
71.5% of Kyndryl shares are owned by institutional investors. Comparatively, 70.4% of Open Text shares are owned by institutional investors. 1.0% of Kyndryl shares are owned by company insiders. Comparatively, 10.6% of Open Text shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Profitability
This table compares Kyndryl and Open Text’s net margins, return on equity and return on assets.
Net Margins | Return on Equity | Return on Assets | |
Kyndryl | -0.58% | -4.09% | -0.46% |
Open Text | 8.35% | 24.34% | 6.60% |
Earnings & Valuation
This table compares Kyndryl and Open Text”s revenue, earnings per share and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
Kyndryl | $16.05 billion | 0.50 | -$340.00 million | ($0.39) | -89.00 |
Open Text | $5.61 billion | 1.44 | $465.09 million | $1.73 | 17.59 |
Open Text has lower revenue, but higher earnings than Kyndryl. Kyndryl is trading at a lower price-to-earnings ratio than Open Text, indicating that it is currently the more affordable of the two stocks.
Summary
Open Text beats Kyndryl on 9 of the 14 factors compared between the two stocks.
About Kyndryl
Kyndryl Holdings, Inc. operates as a technology services company and IT infrastructure services provider worldwide. The company offers cloud services; core enterprise and zCloud services; application, data, and artificial intelligence services; digital workplace services; security and resiliency services; and network services and edge services. It serves financial, communications, retail and travel, and automotive industries. The company was incorporated in 2020 and is headquartered in New York, New York.
About Open Text
Open Text Corporation provides information management software and solutions. The company offers content services, which includes content collaboration and intelligent capture to records management, collaboration, e-signatures, and archiving; and operates experience cloud platform that provides customer experience and web content management, digital asset management, customer analytics, AI and insights, e-discovery, digital fax, omnichannel communications, secure messaging, and voice of customer, as well as customer journey, testing, and segmentation. It also provides cybersecurity cloud solutions to protect, prevent, detect, respond and quickly recover from threats across endpoints, network, applications, IT infrastructure and data, AI-led threat intelligence; and to protect critical information and processes through threat intelligence, forensics, identity, encryption, and cloud-based application security. In addition, the company offers business network cloud for digital supply chains and secure e-commerce ecosystems including digitize and automate procure-to-pay and order-to-cash processes; IT operations management cloud for automation and advancement of IT support and asset management; and analytics & AI cloud solutions that offers artificial intelligence with practical usage to provide organizations with actionable insights and better automation, such as visualizations, advanced natural language processing and understanding, and integrated computer vision capabilities. In addition, it provides application automation cloud, developers cloud, and services. Further, it has strategic partnerships with SAP SE, Google Cloud, Amazon AWS, Microsoft Corporation, Oracle Corporation, Salesforce.com Corporation, DXC Technology Company, Accenture plc, Capgemini Technology Services SAS, Deloitte Consulting LLP, Hewlett Packard Enterprises, and Tata Consultancy Services. Open Text Corporation was incorporated in 1991 and is headquartered in Waterloo, Canada.
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