General Finance (GFN) and Genpact (G) Head-To-Head Review

Genpact (NYSE: G) and General Finance (NASDAQ:GFN) are both business services companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, earnings, valuation and dividends.

Profitability

This table compares Genpact and General Finance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Genpact 10.18% 23.86% 9.71%
General Finance -0.73% -1.29% -0.31%

Institutional and Insider Ownership

91.2% of Genpact shares are owned by institutional investors. Comparatively, 27.6% of General Finance shares are owned by institutional investors. 1.4% of Genpact shares are owned by company insiders. Comparatively, 25.9% of General Finance shares are owned by company 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.

Dividends

Genpact pays an annual dividend of $0.24 per share and has a dividend yield of 0.7%. General Finance does not pay a dividend. Genpact pays out 17.4% of its earnings in the form of a dividend.

Volatility & Risk

Genpact has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500. Comparatively, General Finance has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Genpact and General Finance, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Genpact 0 2 6 0 2.75
General Finance 0 1 1 0 2.50

Genpact presently has a consensus price target of $33.14, suggesting a potential upside of 0.07%. General Finance has a consensus price target of $9.20, suggesting a potential upside of 33.33%. Given General Finance’s higher probable upside, analysts clearly believe General Finance is more favorable than Genpact.

Earnings and Valuation

This table compares Genpact and General Finance’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Genpact $2.57 billion 2.49 $269.68 million $1.38 24.00
General Finance $276.93 million 0.66 -$2.96 million ($0.21) -32.86

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

Summary

Genpact beats General Finance on 12 of the 16 factors compared between the two stocks.

Genpact Company Profile

Genpact Limited is engaged in providing digitally powered business process management and services. The Company is also engaged in designing, transforming and running a combination of processes, as well as providing solutions that combine elements of its service offerings. The Company’s segments include Business process outsourcing and Information technology services. The Company offers various vertical activities, which include banking and financial services, capital markets, consumer product goods services, healthcare, infrastructure and manufacturing services, insurance and life sciences. In addition to these vertical activities, it also offers analytics and research, collections and customer services, consulting and transformation services, core industry operations services, enterprise application services, finance and accounting (F&A) services, information technology (IT) infrastructure management services, and supply chain and procurement services.

General Finance Company Profile

General Finance Corporation is a specialty rental services company. The Company offers a range of portable storage units, including its core 20-feet and 40-feet steel containers, office container, mobile office and modular space products and steel tanks. It has two geographic areas that include its four operating segments: the Asia-Pacific area, consisting of the leasing operations of Royal Wolf Holdings Limited and its Australian and New Zealand subsidiaries (Royal Wolf), and North America, consisting of the combined leasing operations of Pac-Van, Inc. and its Canadian subsidiary, PV Acquisition Corp. (Pac-Van) and Lone Star Tank Rental Inc. (Lone Star), and the manufacturing operations of GFN Manufacturing Corporation and its subsidiary, Southern Frac, LLC (Southern Frac). As of June 30, 2016, the Company provided its storage solutions to over 41,000 customers across a range of industries, including commercial, construction, retail, transportation, education and others.

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