Recent analysis has examined the performance of two small-cap business services companies: Healthcare Services Group (NASDAQ: HCSG) and SPAR Group (NASDAQ: SGRP). This assessment focuses on various factors, including analyst recommendations, earnings, risk profiles, valuations, profitability, institutional ownership, and dividends, to determine which company may be the more favorable investment.
Comparative Profitability and Earnings
When evaluating profitability, the comparison reveals that Healthcare Services Group demonstrates stronger financial metrics than SPAR Group. Specifically, Healthcare Services Group boasts higher net margins, return on equity, and return on assets. In terms of revenue, Healthcare Services Group generates significantly more income than SPAR Group.
With respect to valuation, SPAR Group currently trades at a lower price-to-earnings ratio compared to Healthcare Services Group. This suggests that, while Healthcare Services Group is performing better in terms of earnings, SPAR Group may represent a more affordable option for potential investors.
Analyst Ratings and Market Position
According to data from MarketBeat.com, Healthcare Services Group has a consensus target price of $19.40, indicating a potential upside of 7.36%. Analysts favor Healthcare Services Group over SPAR Group, reflecting stronger consensus ratings and higher predicted growth potential.
The volatility of both stocks presents interesting insights as well. Healthcare Services Group has a beta of 0.71, indicating its share price is 29% less volatile than the S&P 500. In contrast, SPAR Group exhibits a beta of 0.06, suggesting an exceptionally low volatility of 94% compared to the market index.
Institutional and Insider Ownership
Ownership structures reveal significant differences between the two companies. Approximately 98.0% of Healthcare Services Group shares are held by institutional investors, a strong indicator of confidence among large money managers and hedge funds regarding the company’s long-term growth prospects. In contrast, only 9.6% of SPAR Group shares are owned by institutional investors.
On the insider ownership front, 2.6% of Healthcare Services Group’s shares are owned by company insiders, while a notable 50.9% of SPAR Group shares are held by insiders. This disparity may suggest differing levels of confidence among management regarding their respective companies’ future performance.
Company Overviews
Founded in 1976 and headquartered in Bensalem, Pennsylvania, Healthcare Services Group provides management and operational services to the housekeeping, laundry, dietary, and facility maintenance departments of various healthcare facilities across the United States. Its operations are divided into two segments: Housekeeping, which focuses on cleaning and sanitization, and Dietary, which handles food services and dietary management.
SPAR Group, established in 1967 and based in Auburn Hills, Michigan, offers merchandising and brand marketing services across multiple regions, including the Americas, Europe, and the Asia-Pacific. Their services encompass a broad range of activities, from product resets and inventory audits to retail transformation and assembly services.
In summary, the analysis clearly indicates that Healthcare Services Group outperforms SPAR Group across 13 of the 14 factors assessed. Investors seeking robust growth and profitability may find Healthcare Services Group to be the more attractive option.
