In the rapidly evolving landscape of information technology services, two prominent players, CDW Corporation and Cognizant Technology Solutions Corporation, stand out. Both companies operate in similar markets, offering innovative solutions across diverse sectors, including government, healthcare, and enterprise. CDW focuses on IT hardware and integrated solutions, while Cognizant emphasizes consulting and outsourcing services. As we delve into this comparison, I aim to help you identify which company presents a more compelling investment opportunity.
Table of contents
Company Overview
CDW Overview
CDW Corporation, established in 1984 and headquartered in Vernon Hills, Illinois, specializes in providing comprehensive information technology solutions across the United States, the United Kingdom, and Canada. With a market capitalization of approximately $18.8B, the company operates through three segments: Corporate, Small Business, and Public. CDW’s offerings range from discrete hardware and software products to integrated IT solutions that encompass on-premise, hybrid, and cloud capabilities. The firm caters to a diverse clientele, including government entities, educational institutions, and healthcare organizations, and boasts a workforce of about 15,100 employees.
Cognizant Technology Solutions Overview
Founded in 1994 and based in Teaneck, New Jersey, Cognizant Technology Solutions Corporation focuses on consulting, technology, and outsourcing services globally, with a market cap of around $38.2B. It operates through four key segments: Financial Services, Healthcare, Products and Resources, and Communications, Media, and Technology. Cognizant is dedicated to enhancing customer experiences and driving operational improvements through advanced technologies, including AI and robotic process automation. The company employs roughly 336,300 people and serves a wide range of industries, including healthcare and digital media.
Key similarities and differences
Both CDW and Cognizant operate within the information technology services sector, emphasizing consulting and technology solutions. However, while CDW primarily focuses on hardware and integrated IT solutions for diverse markets, Cognizant centers on consulting and outsourcing services across specific industry segments, showcasing a more vertical integration in its offerings.
Income Statement Comparison
Below is a comparison of the income statements for CDW Corporation and Cognizant Technology Solutions for the fiscal year 2024. This will help investors understand their financial performance.
| Metric | CDW Corporation | Cognizant Technology Solutions |
|---|---|---|
| Market Cap | 18.78B | 38.20B |
| 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 |
| Fiscal Year | 2024 | 2024 |
Interpretation of Income Statement
In FY 2024, CDW experienced a slight decline in revenue compared to FY 2023, reflecting a trend of stabilizing top-line growth. Net income also dipped, indicating potential margin pressures. In contrast, Cognizant’s revenue showed a modest increase, with net income reflecting strong operational efficiency. Their EBITDA margin improved, signaling effective cost management. Overall, while CDW may face challenges, Cognizant appears to be on a growth trajectory, making it an attractive option for investors focused on technology services.
Financial Ratios Comparison
The following table illustrates the latest financial ratios for CDW Corporation (CDW) and Cognizant Technology Solutions Corporation (CTSH), providing a comparative analysis of their financial health.
| Metric | CDW | CTSH |
|---|---|---|
| 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% | 27.80% |
| Dividend Yield | 1.43% | 1.57% |
Interpretation of Financial Ratios
In this comparison, CDW exhibits a high return on equity (ROE) and a significantly higher price-to-book (P/B) ratio relative to CTSH, suggesting a premium valuation. However, CDW’s debt-to-equity (D/E) ratio is concerningly high compared to CTSH’s, indicating elevated financial risk. CTSH shows robust liquidity ratios, with a current and quick ratio above 2, suggesting strong short-term financial health. Overall, while CDW shows higher profitability metrics, the risk associated with its debt levels should be carefully considered before investment.
Dividend and Shareholder Returns
CDW Corporation distributes dividends with a payout ratio of approximately 30.8%, indicating a balanced approach to rewarding shareholders while retaining funds for growth. The annual dividend yield stands at 1.43%, with a consistent trend in dividend payments. Cognizant Technology Solutions also offers dividends, with a payout ratio of about 27.8% and a yield of 1.55%. Both companies engage in share buybacks, enhancing shareholder value. These distributions appear sustainable, supporting long-term value creation for shareholders.
Strategic Positioning
CDW Corporation and Cognizant Technology Solutions are significant players in the Information Technology Services sector. CDW holds a solid market share with diverse offerings in hardware and software solutions, while Cognizant leverages its extensive service lines in consulting and technology. Competitive pressure is mounting as both companies face technological disruptions, especially in areas like cloud services and AI. CDW’s focus on integrated IT solutions and Cognizant’s emphasis on digital transformation services position them strategically amid evolving market demands.
Stock Comparison
In the past year, CDW Corporation (CDW) has experienced significant price volatility, culminating in a substantial decrease, while Cognizant Technology Solutions Corporation (CTSH) has shown a positive price movement, reflecting a recovering market sentiment.
Trend Analysis
Over the past year, CDW’s stock has seen a price change of -32.62%, indicating a bearish trend. The highest price reached was 255.78, while the lowest dropped to 140.2. The trend displays deceleration, suggesting that the downward momentum is weakening, but the overall trajectory remains negative. The standard deviation of 32.3 indicates a high level of volatility.
For the recent period from September 14, 2025, to November 30, 2025, CDW’s stock recorded a price change of -12.22% with a standard deviation of 8.71, further emphasizing the bearish sentiment. The buyer-dominance percentage has shifted to 46.96%, indicating a slightly seller-dominant period.
In contrast, CTSH has shown a price increase of 6.69% over the past year, reflecting a bullish trend. With notable highs of 90.7 and lows of 64.26, the trend is characterized by acceleration, indicating strengthening momentum. The standard deviation of 5.21 suggests moderate volatility.
In the recent timeframe from September 14, 2025, to November 30, 2025, CTSH’s stock experienced a price change of 12.35%. The buyer-dominance percentage during this period was 67.13%, signaling a strong buyer-dominant behavior, which reinforces the positive outlook for this stock.
Analyst Opinions
Recent analyst ratings for CDW Corporation (CDW) indicate a solid outlook with a B+ rating, reflecting strong return on equity and assets, although it has a lower score for price-to-book ratio. Analysts suggest a hold position due to mixed valuation metrics. In contrast, Cognizant Technology Solutions Corporation (CTSH) boasts an A rating, driven by robust performance in return on assets and equity, recommending a buy. The consensus for CDW is hold, while for CTSH, it leans towards buy, signaling investor confidence in both companies.
Stock Grades
In the current market landscape, analyzing stock grades from reputable firms can provide valuable insights for investors. Here are the latest grades for CDW Corporation and Cognizant Technology Solutions Corporation.
CDW Corporation Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Raymond James | upgrade | Strong Buy | 2025-11-25 |
| Barclays | maintain | Equal Weight | 2025-11-05 |
| UBS | maintain | Buy | 2025-11-05 |
| Evercore ISI Group | maintain | Outperform | 2025-10-20 |
| UBS | maintain | Buy | 2025-08-07 |
| Barclays | maintain | Equal Weight | 2025-08-07 |
| JP Morgan | maintain | Neutral | 2025-07-17 |
| Citigroup | maintain | Neutral | 2025-07-11 |
| 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 |
| JP Morgan | maintain | Overweight | 2025-10-30 |
| RBC Capital | maintain | Sector Perform | 2025-10-30 |
| Wells Fargo | maintain | Overweight | 2025-10-30 |
| UBS | maintain | Neutral | 2025-10-30 |
| Guggenheim | maintain | Buy | 2025-10-21 |
| JP Morgan | maintain | Overweight | 2025-08-20 |
| Baird | maintain | Neutral | 2025-07-31 |
| JP Morgan | maintain | Overweight | 2025-07-31 |
| JP Morgan | maintain | Overweight | 2025-07-28 |
Overall, CDW Corporation has received a positive upward trend with an upgrade to “Strong Buy” from Raymond James, indicating strong confidence in its performance. Similarly, Cognizant Technology Solutions shows a notable upgrade to “Outperform” by William Blair, reflecting an optimistic outlook from analysts. Investors may want to consider these grades when evaluating their portfolios.
Target Prices
The current target price consensus indicates optimistic expectations for both CDW Corporation and Cognizant Technology Solutions Corporation.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| CDW Corporation | 190 | 148 | 174.33 |
| Cognizant Technology Solutions Corporation | 85 | 78 | 82.8 |
For CDW, the consensus price of 174.33 suggests a potential upside from its current price of 144.22. Similarly, Cognizant’s target consensus of 82.8 indicates room for growth from its current price of 77.72. Overall, analysts exhibit a positive outlook for both companies.
Strengths and Weaknesses
The following table outlines the strengths and weaknesses of CDW Corporation and Cognizant Technology Solutions Corporation based on their most recent financial data.
| 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 while CDW Corporation has a moderate position in several criteria, Cognizant Technology Solutions excels particularly in innovation, global presence, and profitability, suggesting a more robust investment opportunity overall.
Risk Analysis
In the table below, I outline key risks associated with CDW Corporation and Cognizant Technology Solutions Corporation, focusing on their operational frameworks and market environments.
| Metric | CDW Corporation | Cognizant Technology Solutions Corporation |
|---|---|---|
| Market Risk | Moderate | High |
| Regulatory Risk | Moderate | Moderate |
| Operational Risk | High | Moderate |
| Environmental Risk | Low | Low |
| Geopolitical Risk | Moderate | High |
Both companies face varying degrees of market and operational risks, with CDW experiencing significant operational challenges and Cognizant exposed to geopolitical factors. The tech sector’s volatility can substantially affect their performance, particularly in uncertain economic climates.
Which one to choose?
When comparing CDW Corporation (CDW) and Cognizant Technology Solutions Corporation (CTSH), several key metrics and trends emerge. CDW has experienced a bearish stock trend with a price decrease of approximately 32.62% over the past year, while CTSH shows a bullish trend with a price increase of 6.69%. In terms of financial health, CTSH holds a superior rating of “A,” compared to CDW’s “B+” rating. CTSH boasts a higher gross profit margin (34.34% vs. 21.92%) and a lower debt-to-equity ratio (0.10 vs. 2.55), indicating stronger profitability and lower financial risk.
For investors focused on growth and capital appreciation, I recommend considering CTSH. Conversely, those who prefer a more stable investment may find CDW’s profile appealing, despite its current market challenges.
Both companies face risks related to market dependence and competition, which may impact future performance.
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:
