MIND C.T.I. (NASDAQ:MNDO) and Virtusa (NASDAQ:VRTU) Critical Review

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MIND C.T.I. (NASDAQ:MNDO) and Virtusa (NASDAQ:VRTU) are both small-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, earnings, valuation and analyst recommendations.

Valuation & Earnings

This table compares MIND C.T.I. and Virtusa’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MIND C.T.I. $18.14 million 2.41 $5.13 million N/A N/A
Virtusa $1.25 billion 1.07 $16.15 million $1.46 30.27

Virtusa has higher revenue and earnings than MIND C.T.I..

Insider and Institutional Ownership

15.9% of MIND C.T.I. shares are held by institutional investors. Comparatively, 88.0% of Virtusa shares are held by institutional investors. 5.1% of Virtusa shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings for MIND C.T.I. and Virtusa, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MIND C.T.I. 0 0 0 0 N/A
Virtusa 0 0 4 1 3.20

Virtusa has a consensus target price of $58.40, indicating a potential upside of 32.13%. Given Virtusa’s higher probable upside, analysts plainly believe Virtusa is more favorable than MIND C.T.I..

Volatility & Risk

MIND C.T.I. has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500. Comparatively, Virtusa has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500.

Profitability

This table compares MIND C.T.I. and Virtusa’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MIND C.T.I. 30.28% 28.47% 21.57%
Virtusa 1.29% 11.81% 4.14%

Dividends

MIND C.T.I. pays an annual dividend of $0.26 per share and has a dividend yield of 11.8%. Virtusa does not pay a dividend.

Summary

Virtusa beats MIND C.T.I. on 9 of the 14 factors compared between the two stocks.

MIND C.T.I. Company Profile

MIND C.T.I. Ltd., together with its subsidiaries, designs, develops, markets, supports, implements, and operates real-time and off-line convergent billing and customer care software solutions in the United States, the United Kingdom and Rest of Europe, Israel, and internationally. The company offers billing and customer care solution that supports various services, such as voice, data, and content services, as well as prepaid, postpaid, and pay-in-advance payment models in a single platform. Its solutions also include a workflow engine to support the implementation of business processes, including subscriber registration, order management, trouble ticket, and debt collection; and an integral point of sale solution that covers all dealer, store and cashier management, and sales processes. In addition, the company offers professional services comprising installation, turnkey project implementation services, customer support, training and maintenance services, software and process customization, and project management, as well as managed services, including day to day billing operational tasks primarily to its billing and customer care customers. Further, it provides PhonEX-ONE, a call management system that collects, records, and stores call information, which is used by corporations for telecom expense management, call accounting, traffic analysis, and fraud detection. The company offers its products directly, as well as through network equipment vendors and systems integrators, and resellers primarily to communication providers, such as traditional wireline and wireless, voice over IP, broadband IP network operators, LTE operators, cable operators, and mobile virtual network operators. MIND C.T.I. Ltd. was founded in 1995 and is headquartered in Yokne'am Illit, Israel.

Virtusa Company Profile

Virtusa Corporation provides digital engineering and information technology (IT) outsourcing services worldwide. The company offers business and IT consulting services, including advisory/target operating model, business process re-engineering/business management, transformational solution consulting, and business/technology alignment analysis; omni-channel digital strategy, experience design accelerated solution design, and employee engagement; and application portfolio rationalization, SDLC transformation, and BA competency transformation services. It also provides application development, software product engineering, CRM and SAP implementation, content management, enterprise mobility, cloud computing, and social media solutions; systems consolidation and rationalization, technology migration and porting, and legacy application Web-enablement; data management, business intelligence, reporting and decision support, master data management, data integration, and big data analytics; and software quality assurance and managed testing services. In addition, the company offers application maintenance and support, applications enhancement, and cloud-environment management and support; managed infrastructure, and remote application monitoring and support services; and IT efficiency improvement services. Further, it offers digital engineering and operational excellence services-based, and transformational solutions. The company serves communications and technology; banking, financial services, and insurance; and media and information industries. The company has collaboration agreements with Moxtra, Inc. to develop and deploy solutions for financial services firms, as well as the Banking Industry Architecture Network; and Indiana Biosciences Research Institute. The company was formerly known as eRunway, Inc. and changed its name to Virtusa Corporation in April 2002. Virtusa Corporation was founded in 1996 and is headquartered in Southborough, Massachusetts.

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