Critical Analysis: Diebold Nixdorf (NYSE:DBD) & Dell Technologies (NYSE:DELL)

Dell Technologies (NYSE:DELL) and Diebold Nixdorf (NYSE:DBD) are both technology companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.

Insider and Institutional Ownership

76.4% of Dell Technologies shares are owned by institutional investors. Comparatively, 97.0% of Diebold Nixdorf shares are owned by institutional investors. 41.5% of Dell Technologies shares are owned by insiders. Comparatively, 1.1% of Diebold Nixdorf shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Dell Technologies has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500. Comparatively, Diebold Nixdorf has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500.

Profitability

This table compares Dell Technologies and Diebold Nixdorf’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dell Technologies	7.53%	-578.85%	10.64%
Diebold Nixdorf	2.87%	21.16%	5.90%

Analyst Recommendations

This is a breakdown of recent recommendations for Dell Technologies and Diebold Nixdorf, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dell Technologies	0	8	27	1	2.81
Diebold Nixdorf	0	0	2	1	3.33

Dell Technologies currently has a consensus target price of $571.12, suggesting a potential downside of 0.70%. Diebold Nixdorf has a consensus target price of $100.00, suggesting a potential upside of 58.88%. Given Diebold Nixdorf’s stronger consensus rating and higher possible upside, analysts clearly believe Diebold Nixdorf is more favorable than Dell Technologies.

Dividends

Dell Technologies pays an annual dividend of $2.52 per share and has a dividend yield of 0.4%. Diebold Nixdorf pays an annual dividend of $0.40 per share and has a dividend yield of 0.6%. Dell Technologies pays out 14.6% of its earnings in the form of a dividend. Diebold Nixdorf pays out 13.1% 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. Dell Technologies has raised its dividend for 3 consecutive years. Diebold Nixdorf is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Dell Technologies and Diebold Nixdorf”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dell Technologies	$113.54 billion	3.22	$5.94 billion	$17.23	33.38
Diebold Nixdorf	$3.87 billion	0.55	$94.60 million	$3.06	20.57

Dell Technologies has higher revenue and earnings than Diebold Nixdorf. Diebold Nixdorf is trading at a lower price-to-earnings ratio than Dell Technologies, indicating that it is currently the more affordable of the two stocks.

Summary

Dell Technologies beats Diebold Nixdorf on 11 of the 17 factors compared between the two stocks.

About Dell Technologies

Dell Technologies Inc. designs, develops, manufactures, markets, sells, and supports various comprehensive and integrated solutions, products, and services in the Americas, Europe, the Middle East, Asia, and internationally. The company operates through two segments, Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG). The ISG segment provides modern and traditional storage solutions, including all-flash arrays, scale-out file, object platforms, hyper-converged infrastructure, and software-defined storage; and general-purpose and AI-optimized servers. This segment also offers networking products and services comprising wide area network infrastructure, data center and edge networking switches, and cables and optics that help its business customers to transform and modernize their infrastructure, mobilize and enrich end-user experiences, and accelerate business applications and processes; software and peripherals; and consulting, support, and deployment services. The CSG segment provides desktops, workstations, and notebooks; displays, docking stations, keyboards, mice, webcam, and audio devices; and third-party software and peripherals, as well as configuration, support and deployment, and extended warranty services. It is involved in cybersecurity technology-driven security solutions to prevent security breaches, detect malicious activity, respond rapidly when a security breach occurs, and identify emerging threats; originating, collecting, and servicing customer financing arrangements; and the resale of VMware products and services. The company serves enterprises, public institutions, and small and medium-sized businesses through its direct sales channel, value-added resellers, system integrators, distributors, and retailers. The company was formerly known as Denali Holding Inc. and changed its name to Dell Technologies Inc. in August 2016. Dell Technologies Inc. was founded in 1984 and is headquartered in Round Rock, Texas.

About Diebold Nixdorf

Diebold Nixdorf, Incorporated engages in the automating, digitizing, and transforming the way people bank and shop worldwide. It operates through two segments, Banking and Retail. The company offers cash recyclers and dispensers, intelligent deposit terminals, teller automation tools, and kiosk technologies, as well as physical security solutions; and front-end applications for consumer connection points and back-end platforms that manage channel transactions, operations and integration, and facilitate omnichannel transactions, endpoint monitoring, remote asset management, customer marketing, merchandise management, and analytics. It also provides banking product-related services comprising proactive monitoring and rapid resolution of incidents through remote service capabilities or an on-site visit; first- and second-line maintenance, preventive maintenance, and on-demand services; managed and outsourcing services, such as business processes, solution management, upgrades, and transaction processing; and cash management services. In addition, the company offers DN Vynamic software suite to simplify and enhance the consumer experience; modular and integrated point of sale and self-checkout terminals; printers, scales, and mobile scanners; and banknote and coin processing systems, as well as ordering kiosks. Additionally, it provides retail customer's product-related services, such as on-demand and professional services; maintenance and availability services; implementation services; managed mobility services; monitoring and advanced analytics; and store life-cycle management services. The company was formerly known as Diebold, Incorporated and changed its name to Diebold Nixdorf, Incorporated in December 2016. Diebold Nixdorf, Incorporated was founded in 1859 and is headquartered in North Canton, Ohio.