ABM Industries (NYSE: ABM) and Healthcare Services Group (NASDAQ:HCSG) are both mid-cap construction companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, risk, analyst recommendations and institutional ownership.
Valuation & Earnings
This table compares ABM Industries and Healthcare Services Group’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|ABM Industries||$5.26 billion||0.46||$184.60 million||$0.24||178.92|
|Healthcare Services Group||$1.67 billion||2.22||$129.75 million||$1.15||44.02|
ABM Industries has higher revenue and earnings than Healthcare Services Group. Healthcare Services Group is trading at a lower price-to-earnings ratio than ABM Industries, indicating that it is currently the more affordable of the two stocks.
This table compares ABM Industries and Healthcare Services Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Healthcare Services Group||5.07%||24.12%||15.06%|
ABM Industries pays an annual dividend of $0.68 per share and has a dividend yield of 1.6%. Healthcare Services Group pays an annual dividend of $0.75 per share and has a dividend yield of 1.5%. ABM Industries pays out 283.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Healthcare Services Group pays out 65.2% of its earnings in the form of a dividend. ABM Industries has increased its dividend for 9 consecutive years and Healthcare Services Group has increased its dividend for 49 consecutive years.
Risk and Volatility
ABM Industries has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500. Comparatively, Healthcare Services Group has a beta of 0.61, indicating that its share price is 39% less volatile than the S&P 500.
Insider and Institutional Ownership
92.4% of ABM Industries shares are held by institutional investors. Comparatively, 92.7% of Healthcare Services Group shares are held by institutional investors. 1.3% of ABM Industries shares are held by company insiders. Comparatively, 4.3% of Healthcare Services Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
This is a summary of recent ratings and target prices for ABM Industries and Healthcare Services Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Healthcare Services Group||0||2||3||0||2.60|
ABM Industries currently has a consensus price target of $48.33, indicating a potential upside of 12.56%. Healthcare Services Group has a consensus price target of $51.75, indicating a potential upside of 2.23%. Given ABM Industries’ stronger consensus rating and higher possible upside, equities analysts plainly believe ABM Industries is more favorable than Healthcare Services Group.
Healthcare Services Group beats ABM Industries on 10 of the 17 factors compared between the two stocks.
ABM Industries Company Profile
ABM Industries Incorporated is a provider of integrated facility solutions. The Company operates through five segments: Janitorial, Facility Services, Parking, Building & Energy Solutions, and other. Its Janitorial segment provides a range of cleaning services for commercial office buildings, data centers, educational institutions, government buildings, health facilities, industrial buildings, retail stores, sport event facilities and transportation hubs. Its Facility Services segment provides onsite mechanical engineering and technical services and solutions relating to a range of facilities and infrastructure systems. Its Parking segment provides parking and transportation services. Its Building & Energy Solutions segment provides energy solutions; electrical; heating, ventilation and air conditioning; lighting, and other general maintenance and repair services for clients. Its other segment provides facility solutions to airlines and airports.
Healthcare Services Group Company Profile
Healthcare Services Group, Inc. provides management, administrative and operating services to the housekeeping, laundry, linen, facility maintenance and dietary service departments of the healthcare industry, including nursing homes, retirement complexes, rehabilitation centers and hospitals located throughout the United States. The Company operates through two segments: housekeeping, laundry, linen and other services (Housekeeping), and dietary department services (Dietary). Its housekeeping service involves the management of a client’s housekeeping department, which is responsible for the cleaning, disinfecting and sanitizing resident rooms and common areas of a client’s facility. Its dietary services consist of managing the client’s dietary department, which is responsible for food purchasing, meal preparation and providing professional dietitian services, including the development of menus that meet the dietary needs of residents.
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