Mistras Group (NYSE: MG) and General Finance Corporation (NASDAQ:GFN) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, dividends, earnings, profitability and institutional ownership.

Insider & Institutional Ownership

60.6% of Mistras Group shares are held by institutional investors. Comparatively, 19.2% of General Finance Corporation shares are held by institutional investors. 44.7% of Mistras Group shares are held by insiders. Comparatively, 25.8% of General Finance Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Mistras Group and General Finance Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mistras Group 2.69% 7.04% 4.06%
General Finance Corporation -1.81% -1.76% -0.48%

Risk and Volatility

Mistras Group has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500. Comparatively, General Finance Corporation has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500.

Valuation and Earnings

This table compares Mistras Group 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
Mistras Group $680.81 million 0.77 $53.46 million $0.61 30.23
General Finance Corporation $275.92 million 0.45 $55.88 million ($0.33) -14.09

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

Analyst Ratings

This is a summary of current ratings and target prices for Mistras Group and General Finance Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mistras Group 0 4 2 0 2.33
General Finance Corporation 0 0 2 0 3.00

Mistras Group currently has a consensus price target of $34.40, indicating a potential upside of 86.55%. General Finance Corporation has a consensus price target of $7.60, indicating a potential upside of 63.44%. Given Mistras Group’s higher probable upside, analysts plainly believe Mistras Group is more favorable than General Finance Corporation.

Summary

Mistras Group beats General Finance Corporation on 9 of the 12 factors compared between the two stocks.

Mistras Group Company Profile

Mistras Group, Inc. offers asset protection solutions and is a provider of technology-enabled asset protection solutions used to evaluate the structural integrity and reliability of critical energy, industrial and public infrastructure. The Company’s segments are Services segment, which provides asset protection solutions in North America with concentration on the United States along with a Canadian services business, consisting of non-destructive testing, and inspection and engineering services that are used to evaluate structural integrity and reliability of critical energy, industrial and public infrastructure; International segment, which offers services, products and systems similar to those of its Services and Products and Systems segments to markets in Europe, the Middle East, Africa, Asia and South America, and Products and Systems segment, which designs, manufactures, sells, installs and services asset protection products and systems, including equipment and instrumentation.

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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