Syntel

Syntel (SYNT - Snapshot Report) recently declared a regular quarterly dividend of 6 cents per share, which translates into an industry-leading yield of 0.6%. The company also reported third-quarter earnings of 73 cents per share, eclipsing last year’s 54 cents and topping the Zacks Consensus Estimate by 24%.

Company Description

Syntel Inc. provides information technology and knowledge process outsourcing services worldwide. In describing its business, the company explains that it delivers flexible, custom Information Technology and Business Process outsourcing solutions that improve quality and reduce costs. Syntel serves the financial services, healthcare, insurance, automotive and retail industries among others.

Solid Income

The company recently declared a regular quarterly dividend of 6 cents per share, noting that it is payable on January 14 to shareholders of record at the close of business on December 31.

The 6–cent dividend translates into an industry-leading yield of 0.6%.

Strong Third Quarter

In late October, Syntel reported third-quarter earnings of 73 cents per share, eclipsing last year’s 54 cents and topping the Zacks Consensus Estimate by 24%.

Revenue was 1% year-over-year, totaling $104.7 million and was 5% above the previous quarter’s result.

Management said the strong financial and operating discipline at Syntel has been evident in its financial performance during a very difficult nine month period. The company expects that as the demand environment for offshore services improves, margin pressure will increase.

Higher Forecasts

Syntel noted in the quarterly report that it sees full year earnings ranging between $2.60 and $2.65 per share.

Analysts polled by Zacks are forecasting 2009 earnings of $2.64 per share, up from last month’s $2.44.

Strong Industry Comparisons

The technology services player has a return on equity (ROE) of 40%, more than doubling the industry-average of 14%. The company boasts a solid balance sheet, showing no debt. Its net profit margin of 27% is well above the industry average of 5%.

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