Comparing UL Solutions (NYSE:ULS) & Genpact (NYSE:G)

Genpact (NYSE:G) and UL Solutions (NYSE:ULS) are both industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.

Institutional and Insider Ownership

96.0% of Genpact shares are owned by institutional investors. 1.6% of Genpact shares are owned by company insiders. Comparatively, 1.2% of UL Solutions 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.

Valuation and Earnings

This table compares Genpact and UL Solutions”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Genpact	$5.08 billion	1.13	$552.49 million	$3.37	10.20
UL Solutions	$3.05 billion	4.63	$325.00 million	$2.47	28.34

Genpact has higher revenue and earnings than UL Solutions. Genpact is trading at a lower price-to-earnings ratio than UL Solutions, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Genpact and UL Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Genpact	11.04%	23.34%	10.68%
UL Solutions	16.02%	28.81%	13.25%

Analyst Ratings

This is a breakdown of current recommendations for Genpact and UL Solutions, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Genpact	0	7	2	0	2.22
UL Solutions	0	5	7	0	2.58

Genpact currently has a consensus target price of $39.33, indicating a potential upside of 14.39%. UL Solutions has a consensus target price of $95.78, indicating a potential upside of 36.83%. Given UL Solutions’ stronger consensus rating and higher probable upside, analysts clearly believe UL Solutions is more favorable than Genpact.

Volatility and Risk

Genpact has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500. Comparatively, UL Solutions has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500.

Dividends

Genpact pays an annual dividend of $0.75 per share and has a dividend yield of 2.2%. UL Solutions pays an annual dividend of $0.58 per share and has a dividend yield of 0.8%. Genpact pays out 22.3% of its earnings in the form of a dividend. UL Solutions pays out 23.5% 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. Genpact has raised its dividend for 6 consecutive years. Genpact is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

UL Solutions beats Genpact on 9 of the 17 factors compared between the two stocks.

About Genpact

Genpact Limited provides business process outsourcing and information technology services in India, rest of Asia, North and Latin America, and Europe. It operates through three segments: Financial services; Consumer and Healthcare; and High Tech and Manufacturing. The Financial Services segment offers retail customer onboarding, customer service, collections, card servicing operations, loan and payment operations, commercial loan, equipment and auto loan, mortgage origination, compliance services, reporting and monitoring, and wealth management operations support; financial crime and risk management services; and underwriting support, new business processing, policy administration, claims management, catastrophe modeling and actuarial services, as well as property and casualty claims. The Consumer and Healthcare segment provides demand generation, sensing and planning, supply chain planning and management, pricing and trade promotion management, deduction recovery management, order management, and digital commerce; and end-to-end claim lifecycle management, from claims processing and adjudication to claims recovery and payment integrity, revenue cycle management, health equity analytics, and care services. The High Tech and Manufacturing segment offers industry-specific solutions for trust and safety, advertising sales support, customer and user experience, and customer care support; and direct and indirect procurement, logistics, field, aftermarket support, and engineering services. It also provides digital operation services; data-tech-Al services; finance and accounting services, such as accounts payable, invoice-to-cash, record to report, financial planning and analysis, and enterprise risk and compliance; CFO advisory services; supply chain, and sourcing and procurement services; sales and commercial, and marketing and experience services; and environmental, social and governance services. The company was founded in 1997 and is based in Hamilton, Bermuda.

About UL Solutions

UL Solutions Inc. provides safety science services worldwide. It operates through three segments: Industrial, Consumer, and Software and Advisory. The Industrial segment provides testing, inspection, and certification services across various end markets, including energy, industrial automation, engineered materials, and built environment, as well as stakeholders, such as manufacturers, building owners, end users, and regulators. The Consumer segment offers safety certification testing, ongoing certification, global market access, testing for connectivity, performance and quality, and critical systems advisory and training services, as well as product market acceptance and risk mitigation services for customers in the consumer products end markets comprising consumer electronics, medical devices, information technologies, appliances, HVAC, lighting, and retail, as well as consumer applications, such as new mobility, smart products, and 5G. The Software and Advisory segment provide software and technical advisory services that enable customers to manage regulatory requirements, deliver supply chain transparency, and operationalize sustainability for regulated industries, including life sciences, supply chain regulations, transparency needs, and new ESG and sustainability requirements. It offers ULTRUS software brand to help customers improve speed to market, sustainability and safety. UL Solutions Inc. was formerly known as UL Inc. and changed its name to UL Solutions Inc. in June 2022. The company was founded in 1894 and is headquartered in Northbrook, Illinois with additional offices in North America, Asia Pacific, Africa, Europe, Latin America, and Middle East. UL Solutions Inc. operates as a subsidiary of ULSE Inc.