Sykes Enterprises (NASDAQ:SYKE) versus Parsons (NASDAQ:PSN) Critical Review

Parsons (NYSE:PSN) and Sykes Enterprises (NASDAQ:SYKE) are both business services companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, profitability, dividends and earnings.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Parsons and Sykes Enterprises, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Parsons 0 3 4 0 2.57
Sykes Enterprises 0 2 0 0 2.00

Parsons presently has a consensus target price of $39.50, suggesting a potential upside of 0.15%. Sykes Enterprises has a consensus target price of $36.50, suggesting a potential upside of 4.89%. Given Sykes Enterprises’ higher probable upside, analysts plainly believe Sykes Enterprises is more favorable than Parsons.

Profitability

This table compares Parsons and Sykes Enterprises’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Parsons 2.97% -11.53% 3.87%
Sykes Enterprises 3.62% 10.08% 6.32%

Valuation & Earnings

This table compares Parsons and Sykes Enterprises’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Parsons $3.56 billion 1.10 $222.34 million N/A N/A
Sykes Enterprises $1.63 billion 0.89 $48.93 million $2.02 17.23

Parsons has higher revenue and earnings than Sykes Enterprises.

Institutional and Insider Ownership

89.3% of Sykes Enterprises shares are held by institutional investors. 3.8% of Sykes Enterprises shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Sykes Enterprises beats Parsons on 6 of the 11 factors compared between the two stocks.

Parsons Company Profile

Parsons Corporation provides technology based solutions in the defense, intelligence, and critical infrastructure markets in North America, the Middle East, and internationally. It operates in two segments, Federal Solutions and Critical Infrastructure. The company offers cybersecurity software and engineering services, hardware prototyping, and other technical services to the U.S. Army and the United States intelligence community; ThunderRidge, a tool that assists cyber operational users to develop action plans, assess cyber threats, and disseminate situational awareness in real-time; and geospatial intelligence, big data analytics, and threat mitigation technology services to the defense, intelligence, space and command, control, communications, computer, cyber, intelligence, surveillance, and reconnaissance. It also provides mission planning for space situational awareness, small satellite systems integration, electronic warfare, directed energy modeling and simulation, and command and control systems and support to the Missile Defense Agency, the U.S. Air Force, and the U.S. Army; converged cyber-physical solutions for critical infrastructure, and global military mission readiness and training services to the Federal Aviation Administration and the U.S. Army; and technology services for advanced energy production systems, healthcare systems, environmental systems, and related infrastructure. In addition, the company offers intelligent transportation system management, train controls integration, smart cities software, and critical infrastructure cyber protection to the transportation authorities, rail, and transit entities; engineering services for complex infrastructure, including bridges and tunnels, roads and highways, airports, and rail and transit; and engineering, program management, and environmental solutions to private-sector industrial clients and public utilities. Parsons Corporation was founded in 1944 and is headquartered in Centreville, Virginia.

Sykes Enterprises Company Profile

Sykes Enterprises, Incorporated, together with its subsidiaries, provides multichannel demand generation and global customer engagement services. Its customer care services include handling billing inquiries and claims, activating customer accounts, resolving complaints, cross-selling/up-selling, and prequalifying and warranty management, as well as providing health information and dispatching roadside assistance. The company's technical support services comprise support around complex networks, hardware and software, communications equipment, Internet access technology, and Internet portal usage. It also provides customer acquisition services, which focuses around digital marketing, multichannel demand generation, and inbound up-selling and sales conversion, as well as outbound selling of its clients' products and services. In addition, the company offers technical staffing and outsourced corporate help desk services; and fulfillment services, such as order and payment processing, inventory control, product delivery, and product returns handling, as well as consulting, implementation, hosting, and managed services that optimize its differentiated full lifecycle management services platform. The company offers its services through phone, email, social media, text messaging, chat, and digital self-service support. Sykes Enterprises, Incorporated provides its services to corporations, medium-sized businesses, and public institutions in the financial services, communications, technology, transportation and leisure, healthcare, and other industries. It operates in the United States, Canada, Latin America, Australia, the Asia Pacific Rim, Europe, the Middle East, and Africa. Sykes Enterprises, Incorporated was founded in 1977 and is headquartered in Tampa, Florida.

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