In the rapidly evolving landscape of technology services, two giants stand out: CDW Corporation and Cognizant Technology Solutions Corporation. Both companies operate within the Information Technology Services industry, yet they adopt distinct approaches to innovation and market engagement. While CDW focuses on providing integrated IT solutions across various sectors, Cognizant excels in consulting and outsourcing services, addressing unique client needs. As an investor, understanding the nuances between these companies will help you determine which one presents the most compelling opportunity for your portfolio.
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Company Overview
CDW Overview
CDW Corporation operates as a leading provider of information technology (IT) solutions across the United States, United Kingdom, and Canada. Founded in 1984 and headquartered in Vernon Hills, Illinois, CDW serves a diverse clientele, including government, education, and healthcare sectors, as well as small to large businesses. The company offers a comprehensive range of hardware and software products, along with integrated IT solutions that encompass on-premise, hybrid, and cloud capabilities. With a focus on delivering tailored IT services, CDW emphasizes customer needs through its three segments: Corporate, Small Business, and Public.
Cognizant Technology Solutions Corporation Overview
Cognizant Technology Solutions Corporation, based in Teaneck, New Jersey, specializes in consulting, technology, and outsourcing services. Established in 1994, the company serves clients across various sectors, including financial services, healthcare, and communications. With a robust market presence, Cognizant leverages advanced technologies such as AI, analytics, and robotic process automation to enhance customer experiences and drive operational improvements. The firm operates through four key segments, addressing a wide array of business challenges while promoting digital transformation for its clients.
The primary similarity between CDW and Cognizant lies in their focus on the information technology services industry, catering to a diverse range of sectors. However, their business models diverge: CDW emphasizes hardware and software sales along with integrated IT solutions, while Cognizant prioritizes consulting and outsourcing services to facilitate digital transformation.
Income Statement Comparison
Below is a comparison of the most recent income statements for CDW Corporation and Cognizant Technology Solutions Corporation, highlighting key financial metrics for fiscal year 2024.
| Metric | CDW Corporation | Cognizant Technology Solutions |
|---|---|---|
| Revenue | 20.99B | 19.74B |
| EBITDA | 1.93B | 3.53B |
| EBIT | 1.65B | 2.99B |
| Net Income | 1.08B | 2.24B |
| EPS | 8.06 | 4.52 |
Interpretation of Income Statement
In 2024, CDW Corporation experienced a slight decline in revenue compared to the previous year, reflecting a broader trend of stabilization in its growth rate. Meanwhile, Cognizant Technology Solutions demonstrated robust revenue growth, maintaining strong profitability with an increase in net income and EBITDA. CDW’s margins showed stability, yet both companies exhibited competitive performance, with CDW’s EPS slightly decreasing while Cognizant’s improved, indicating a shift in market favor towards the latter. This analysis suggests investors should closely monitor these trends for future investment decisions, considering the evolving competitive landscape.
Financial Ratios Comparison
Below is a comparative analysis of key financial metrics for CDW Corporation and Cognizant Technology Solutions Corporation. This table includes the most recent revenue and ratios for both companies.
| Metric | CDW | Cognizant |
|---|---|---|
| ROE | 45.81% | 15.55% |
| ROIC | 13.13% | 13.24% |
| P/E | 21.61 | 17.03 |
| P/B | 9.90 | 2.65 |
| Current Ratio | 1.35 | 2.09 |
| Quick Ratio | 1.24 | 2.09 |
| D/E | 2.55 | 0.10 |
| Debt-to-Assets | 40.82% | 7.53% |
| Interest Coverage | 7.70 | 53.56 |
| Asset Turnover | 1.43 | 0.99 |
| Fixed Asset Turnover | 67.26 | 12.77 |
| Payout Ratio | 30.81% | 27.79% |
| Dividend Yield | 1.43% | 1.57% |
Interpretation of Financial Ratios
CDW Corporation exhibits a strong return on equity (ROE) and a high price-to-book (P/B) ratio, indicating robust profitability and market valuation. However, its high debt-to-equity (D/E) ratio raises concerns about leverage risk. Conversely, Cognizant shows lower debt levels and a strong interest coverage ratio, reflecting financial stability. Its lower P/E ratio suggests it may be undervalued relative to CDW. Overall, both companies have strengths, but risk management should be a priority, especially for CDW.
Dividend and Shareholder Returns
CDW Corporation consistently pays dividends, with a current annual dividend yield of 1.43% and a payout ratio of approximately 30.8%. The dividend per share has shown a positive trend, supporting sustainable shareholder returns. Additionally, CDW engages in share buybacks, enhancing shareholder value.
In contrast, Cognizant Technology Solutions Corporation also pays dividends, with a yield of 1.57% and a payout ratio of about 27.8%. Their strategy, which includes share buybacks, aligns with long-term value creation for shareholders. Overall, both companies demonstrate a commitment to returning value to shareholders.
Strategic Positioning
In the competitive landscape of Information Technology Services, CDW Corporation holds a market capitalization of approximately $18.25B, while Cognizant Technology Solutions Corporation is significantly larger at about $37.34B. CDW focuses on integrated IT solutions, while Cognizant emphasizes consulting and outsourcing across various sectors. Both companies face competitive pressure from emerging technologies and digital transformation trends, which necessitate ongoing innovation and adaptation to maintain market relevance. As technological disruptions evolve, effective risk management will be crucial for sustaining their market positions.
Stock Comparison
Over the past year, CDW Corporation (CDW) and Cognizant Technology Solutions Corporation (CTSH) have experienced notable price movements, reflecting distinct trading dynamics that could influence investor sentiment.
Trend Analysis
For CDW, the overall percentage change over the past year is -38.32%, indicating a bearish trend. The stock reached a high of 255.78 and a low of 140.2, with a deceleration in trend noted. The standard deviation of 32.02 indicates significant price volatility, which may concern risk-averse investors. In the recent period from September 7 to November 23, 2025, CDW saw a price change of -17.4%, with a standard deviation of 9.39, confirming continued bearish sentiment.
Conversely, CTSH has shown resilience with a modest overall percentage change of 0.6%, classifying its trend as bullish. The stock recorded a high of 90.7 and a low of 64.26, with acceleration in its trend noted. The standard deviation of 5.2 suggests relatively lower volatility compared to CDW. In the recent analysis period from September 7 to November 23, 2025, CTSH’s price increased by 5.79%, further supporting its bullish outlook.
In summary, while CDW’s significant declines warrant caution, CTSH’s steady performance presents a more favorable investment opportunity.
Analyst Opinions
Recent analyst recommendations for CDW Corporation (CDW) indicate a “Buy” rating with a B+ score, reflecting strong return metrics, particularly in return on equity (5) and return on assets (4). Analysts appreciate CDW’s solid financial health despite its lower debt-to-equity ratio (1). Conversely, Cognizant Technology Solutions Corporation (CTSH) has received an “A” rating, with an overall score of 4, highlighting its excellent return on assets (5) and manageable debt-to-equity ratio (3). The consensus for both companies leans towards a “Buy” for the current year, suggesting positive growth expectations.
Stock Grades
In this section, I will present the latest stock ratings for CDW Corporation and Cognizant Technology Solutions Corporation, reflecting the opinions of reputable grading companies.
CDW Corporation Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Barclays | Maintain | Equal Weight | 2025-11-05 |
| UBS | Maintain | Buy | 2025-11-05 |
| Evercore ISI Group | Maintain | Outperform | 2025-10-20 |
| Barclays | Maintain | Equal Weight | 2025-08-07 |
| UBS | Maintain | Buy | 2025-08-07 |
| JP Morgan | Maintain | Neutral | 2025-07-17 |
| Citigroup | Maintain | Neutral | 2025-07-11 |
| Citigroup | Maintain | Neutral | 2025-05-08 |
| UBS | Maintain | Buy | 2025-05-08 |
| Barclays | Maintain | Equal Weight | 2025-05-08 |
Cognizant Technology Solutions Corporation Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| William Blair | Upgrade | Outperform | 2025-11-21 |
| Wells Fargo | Maintain | Overweight | 2025-10-30 |
| JP Morgan | Maintain | Overweight | 2025-10-30 |
| UBS | Maintain | Neutral | 2025-10-30 |
| RBC Capital | Maintain | Sector Perform | 2025-10-30 |
| Guggenheim | Maintain | Buy | 2025-10-21 |
| JP Morgan | Maintain | Overweight | 2025-08-20 |
| JP Morgan | Maintain | Overweight | 2025-07-31 |
| JP Morgan | Maintain | Overweight | 2025-07-28 |
| Guggenheim | Upgrade | Buy | 2025-07-18 |
Overall, CDW Corporation maintains a consistent rating with several firms, suggesting stability, while Cognizant shows a recent upgrade from William Blair, indicating a positive shift in investor sentiment.
Target Prices
Analysts have provided reliable target prices for both CDW Corporation and Cognizant Technology Solutions Corporation, reflecting their market expectations.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| CDW Corporation | 190 | 148 | 169 |
| Cognizant Technology Solutions Corporation | 85 | 78 | 82.8 |
The target consensus for CDW Corporation is 169, indicating potential upside from its current price of 140.2. For Cognizant, the consensus of 82.8 suggests a modest increase from its current price of 75.98. Overall, analysts are optimistic about both companies’ prospects.
Strengths and Weaknesses
The following table outlines the strengths and weaknesses of CDW Corporation and Cognizant Technology Solutions Corporation, two leading players in the technology services sector.
| Criterion | CDW Corporation | Cognizant Technology Solutions |
|---|---|---|
| Diversification | Moderate | High |
| Profitability | Moderate | High |
| Innovation | Moderate | High |
| Global presence | Moderate | Strong |
| Market Share | Moderate | High |
| Debt level | High | Low |
Key takeaways from the analysis indicate that Cognizant stands out with its high levels of innovation and profitability, as well as a strong global presence. In contrast, CDW shows higher debt levels, which may pose risks for investors.
Risk Analysis
The following table summarizes the key risks associated with CDW Corporation and Cognizant Technology Solutions Corporation.
| Metric | CDW Corporation | Cognizant Technology Solutions |
|---|---|---|
| Market Risk | Moderate | Moderate |
| Regulatory Risk | High | Moderate |
| Operational Risk | High | Low |
| Environmental Risk | Moderate | Low |
| Geopolitical Risk | Moderate | High |
Both companies face notable risks, but regulatory and operational risks are particularly impactful for CDW, given the stringent compliance requirements in the technology sector. Cognizant, while less exposed operationally, must navigate geopolitical uncertainties that may affect its global operations.
Which one to choose?
When comparing CDW Corporation (CDW) and Cognizant Technology Solutions Corporation (CTSH), both companies present distinct investment characteristics. CDW shows a solid return on equity (ROE) of 46% but faces a bearish stock trend with a recent price decline of 17.4%, and it holds a B+ rating from analysts. In contrast, Cognizant boasts a bullish trend with a 5.79% increase in recent prices and has an overall A rating, driven by its impressive gross profit margin of 34% and a lower price-to-earnings ratio of 17.
For investors focused on growth, CTSH appears more favorable due to its positive stock momentum and robust financial metrics. Conversely, those who prioritize income stability might lean towards CDW, which offers a slightly higher dividend yield.
However, investors should be cautious of the competitive landscape and potential market volatility impacting both companies.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of CDW Corporation and Cognizant Technology Solutions Corporation to enhance your investment decisions:
