The Advisory Board (NASDAQ: ABCO) and General Finance Corporation (NASDAQ:GFN) are both medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, analyst recommendations, dividends and risk.

Profitability

This table compares The Advisory Board and General Finance Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Advisory Board 13.65% 12.69% 3.30%
General Finance Corporation -1.81% -1.76% -0.48%

Valuation & Earnings

This table compares The Advisory Board and General Finance Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
The Advisory Board $799.15 million 2.70 $120.83 million $2.69 19.72
General Finance Corporation $275.92 million 0.45 $55.88 million ($0.33) -14.09

The Advisory Board has higher revenue and earnings than General Finance Corporation. General Finance Corporation is trading at a lower price-to-earnings ratio than The Advisory Board, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings for The Advisory Board and General Finance Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Advisory Board 1 9 3 0 2.15
General Finance Corporation 0 0 2 0 3.00

The Advisory Board presently has a consensus price target of $49.66, suggesting a potential downside of 6.39%. General Finance Corporation has a consensus price target of $7.60, suggesting a potential upside of 63.44%. Given General Finance Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe General Finance Corporation is more favorable than The Advisory Board.

Risk & Volatility

The Advisory Board has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500. Comparatively, General Finance Corporation has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500.

Institutional & Insider Ownership

19.2% of General Finance Corporation shares are owned by institutional investors. 4.7% of The Advisory Board shares are owned by company insiders. Comparatively, 25.8% of General Finance Corporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

The Advisory Board beats General Finance Corporation on 9 of the 13 factors compared between the two stocks.

The Advisory Board Company Profile

The Advisory Board Company is a provider of software and solutions to the healthcare and higher education industries. The Company offers subscription-based membership programs, software and data-enabled services. All of its programs are rooted in best practices and extends across four areas, including Best practices research, Technology, Data-enabled services and Consulting services. The best practices research and insight programs provide the foundation for all of its other programs. The Company offers technology analytics programs anchored by cloud-based software applications that surface performance improvement opportunities to accelerate progress. Through its consulting services, the Company provides on-the-ground support for performance improvement initiatives, as well as best practice professional management of areas of the hospital or medical group. The Company’s data-enabled services are primarily focused in the area of enrollment management.

General Finance Corporation Company Profile

General Finance Corporation is a specialty rental services company. The Company offers a range of portable storage units, including its core 20-feet and 40-feet steel containers, office container, mobile office and modular space products and steel tanks. It has two geographic areas that include its four operating segments: the Asia-Pacific area, consisting of the leasing operations of Royal Wolf Holdings Limited and its Australian and New Zealand subsidiaries (Royal Wolf), and North America, consisting of the combined leasing operations of Pac-Van, Inc. and its Canadian subsidiary, PV Acquisition Corp. (Pac-Van) and Lone Star Tank Rental Inc. (Lone Star), and the manufacturing operations of GFN Manufacturing Corporation and its subsidiary, Southern Frac, LLC (Southern Frac). As of June 30, 2016, the Company provided its storage solutions to over 41,000 customers across a range of industries, including commercial, construction, retail, transportation, education and others.

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