Critical Comparison: Brookfield Business Partners (NYSE:BBU) vs. Concentrix (NASDAQ:CNXC)

Brookfield Business Partners (NYSE:BBU) and Concentrix (NASDAQ:CNXC) are both mid-cap business services companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, risk and valuation.

Insider & Institutional Ownership

85.0% of Brookfield Business Partners shares are owned by institutional investors. Comparatively, 90.3% of Concentrix shares are owned by institutional investors. 3.2% of Concentrix shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Brookfield Business Partners has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500. Comparatively, Concentrix has a beta of 0.48, suggesting that its stock price is 52% less volatile than the S&P 500.

Dividends

Brookfield Business Partners pays an annual dividend of $0.25 per share and has a dividend yield of 0.7%. Concentrix pays an annual dividend of $1.44 per share and has a dividend yield of 3.9%. Brookfield Business Partners pays out -13.9% of its earnings in the form of a dividend. Concentrix pays out -6.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Concentrix has increased its dividend for 3 consecutive years. Concentrix is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Brookfield Business Partners and Concentrix, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Brookfield Business Partners	1	1	5	0	2.57
Concentrix	0	2	3	0	2.60

Brookfield Business Partners currently has a consensus target price of $37.00, suggesting a potential upside of 4.97%. Concentrix has a consensus target price of $63.75, suggesting a potential upside of 70.68%. Given Concentrix’s stronger consensus rating and higher possible upside, analysts clearly believe Concentrix is more favorable than Brookfield Business Partners.

Earnings and Valuation

This table compares Brookfield Business Partners and Concentrix”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Brookfield Business Partners	$40.62 billion	0.08	-$37.00 million	($1.80)	-19.58
Concentrix	$9.83 billion	0.24	-$1.28 billion	($20.84)	-1.79

Brookfield Business Partners has higher revenue and earnings than Concentrix. Brookfield Business Partners is trading at a lower price-to-earnings ratio than Concentrix, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Brookfield Business Partners and Concentrix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Brookfield Business Partners	-3.02%	-5.59%	-1.11%
Concentrix	-13.02%	16.91%	5.49%

Summary

Concentrix beats Brookfield Business Partners on 10 of the 17 factors compared between the two stocks.

About Brookfield Business Partners

Brookfield Business Partners L.P. is a private equity firm specializing in acquisition. The firm typically invests in business services, infrastructure services, construction, energy, and industrials sector. It prefers to take majority stake in companies. The firm seeks returns of at least 15% on its investments. Brookfield Business Partners L.P. was founded in 2016 and is based in Hamilton, Bermuda. Brookfield Business Partners L.P. operates as a subsidiary of Brookfield Corporation.

About Concentrix

Concentrix Corporation engages in the provision of technology-infused customer experience (CX) solutions worldwide. The company provides CX process optimization, technology innovation, front- and back-office automation, analytics, and business transformation services, across various channels of communication, such as voice, chat, email, social media, asynchronous messaging, and custom applications. It also offers customer lifecycle management; customer experience/user experience strategy and design; analytics and actionable insights; digital transformation services that design and engineer CX solutions to enable efficient customer self-service and build customer loyalty; customer engagement solutions and services that address the entirety of the customer lifecycle; AI technology that can intelligently act on customer intent to improve customer experience with non-human engagement; voice of the customer and analytics solutions to gather and analyze customer feedback to foster loyalty to, and growth with, clients; analytics and consulting solutions that synthesize data and provide professional insight to improve clients’ customer experience strategies; vertical business process outsourcing (BPO) services; and back office BPO services that support clients in non-customer facing areas. The company’s clients include technology and consumer electronics, retail, travel and e-commerce, communications and media, banking, financial services and insurance, healthcare, and others, as well as global IPOs, social brands, and banks. Concentrix Corporation was founded in 2004 and is based in Newark, California.