Reviewing Amdocs Limited (DOX) & SecureWorks Corp. (SCWX)

Amdocs Limited (NASDAQ: DOX) and SecureWorks Corp. (NASDAQ:SCWX) are both computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.

Profitability

This table compares Amdocs Limited and SecureWorks Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Amdocs Limited 11.11% 14.75% 9.69%
SecureWorks Corp. -8.97% -3.32% -2.31%

Risk & Volatility

Amdocs Limited has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500. Comparatively, SecureWorks Corp. has a beta of 3.04, indicating that its stock price is 204% more volatile than the S&P 500.

Insider & Institutional Ownership

89.3% of Amdocs Limited shares are held by institutional investors. Comparatively, 7.7% of SecureWorks Corp. shares are held by institutional investors. 15.4% of Amdocs Limited shares are held by company insiders. Comparatively, 88.0% of SecureWorks Corp. shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for Amdocs Limited and SecureWorks Corp., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Amdocs Limited 0 4 3 0 2.43
SecureWorks Corp. 2 3 5 0 2.30

Amdocs Limited currently has a consensus target price of $69.14, suggesting a potential upside of 5.34%. SecureWorks Corp. has a consensus target price of $14.00, suggesting a potential upside of 17.65%. Given SecureWorks Corp.’s higher possible upside, analysts plainly believe SecureWorks Corp. is more favorable than Amdocs Limited.

Earnings and Valuation

This table compares Amdocs Limited and SecureWorks Corp.’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Amdocs Limited $3.83 billion 2.49 $719.32 million $2.87 22.87
SecureWorks Corp. $455.77 million 2.12 -$25.29 million ($0.52) -22.88

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

Dividends

Amdocs Limited pays an annual dividend of $0.88 per share and has a dividend yield of 1.3%. SecureWorks Corp. does not pay a dividend. Amdocs Limited pays out 30.7% of its earnings in the form of a dividend.

Summary

Amdocs Limited beats SecureWorks Corp. on 10 of the 15 factors compared between the two stocks.

About Amdocs Limited

Amdocs Limited is a provider of software and services for communications, entertainment and media industry service providers. The Company develops, implements and manages software and services associated with business support systems (BSS), operational support systems (OSS) and network operations to enable service providers to introduce new products and services, process orders, monetize data, support new business models and enhance their understanding of their customers. The Company’s segment provides software products and services. Its services include strategic business consulting, systems integration and transformation, managed services and testing. Its managed services provide multi-year, flexible and tailored business processes and applications services, including application development and maintenance, information technology (IT) and infrastructure services, testing and professional services.

About SecureWorks Corp.

Secureworks Corp. is a holding company. The Company provides intelligence-driven information security solutions. The Company is focused on protecting the Company’s clients from cyber-attacks. The Company’s solutions enable companies to fortify their cyber defenses to prevent security breaches, detect malicious activity in real time, prioritize and respond to security incidents, and predict emerging threats. The Company offered managed security and threat intelligence on a subscription basis under contracts with initial terms that typically range from one to three years and, as of February 3, 2017. The Company’s integrated suite of solutions includes Managed security, Threat intelligence, Security and risk consulting and Incident response.

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