On Assignment (NYSE: ASGN) and ManpowerGroup (NYSE:MAN) are both mid-cap business services companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, dividends, profitability, earnings, institutional ownership and valuation.

Analyst Recommendations

This is a summary of recent ratings for On Assignment and ManpowerGroup, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
On Assignment 0 0 2 0 3.00
ManpowerGroup 0 4 1 0 2.20

On Assignment currently has a consensus target price of $56.00, suggesting a potential upside of 13.45%. ManpowerGroup has a consensus target price of $105.75, suggesting a potential downside of 7.15%. Given On Assignment’s stronger consensus rating and higher probable upside, analysts clearly believe On Assignment is more favorable than ManpowerGroup.

Volatility & Risk

On Assignment has a beta of 2.13, suggesting that its stock price is 113% more volatile than the S&P 500. Comparatively, ManpowerGroup has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500.

Institutional and Insider Ownership

90.1% of On Assignment shares are owned by institutional investors. Comparatively, 93.7% of ManpowerGroup shares are owned by institutional investors. 5.4% of On Assignment shares are owned by company insiders. Comparatively, 0.9% of ManpowerGroup shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares On Assignment and ManpowerGroup’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
On Assignment 4.32% 16.71% 8.42%
ManpowerGroup 2.24% 17.90% 5.78%

Valuation and Earnings

This table compares On Assignment and ManpowerGroup’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
On Assignment $2.53 billion 1.03 $263.01 million $2.04 24.20
ManpowerGroup $19.98 billion 0.38 $853.20 million $6.55 17.39

ManpowerGroup has higher revenue and earnings than On Assignment. ManpowerGroup is trading at a lower price-to-earnings ratio than On Assignment, indicating that it is currently the more affordable of the two stocks.

Dividends

ManpowerGroup pays an annual dividend of $1.86 per share and has a dividend yield of 1.6%. On Assignment does not pay a dividend. ManpowerGroup pays out 28.4% of its earnings in the form of a dividend. ManpowerGroup has increased its dividend for 6 consecutive years.

Summary

On Assignment beats ManpowerGroup on 10 of the 17 factors compared between the two stocks.

On Assignment Company Profile

On Assignment, Inc. is a global provider of in-demand, skilled professionals in the technology, life sciences and creative sectors. The Company matches resumes with job descriptions to match people they know into positions they understand for temporary, contract-to-hire, and direct hire assignments. It operates through two segments. The Apex segment provides technical, scientific and creative professionals for temporary, contract-to-hire and permanent placement positions and consulting services to clients across the United States. The Apex segment includes Apex Systems, Lab Support and Creative Circle. The Oxford segment provides specialized niche staffing, permanent placement and consulting services in select skill and geographic markets. The Oxford segment includes Oxford Global Resources, CyberCoders and Life Sciences Europe. The Company has a network of branch offices throughout the United States, Canada and Europe.

ManpowerGroup Company Profile

ManpowerGroup Inc. is a provider of workforce solutions and services. The Company’s segments include Americas, Southern Europe, Northern Europe, Asia Pacific Middle East (APME), Right Management and Corporate. The Company’s Americas segment includes operations in the United States and Other Americas. Its Southern Europe segment includes operations in France, Italy and Other Southern Europe. Its Northern Europe segment includes operations in the United Kingdom, the Nordics, Germany and the Netherlands. The Company’s APME operations provide a range of workforce solutions and services offered through Manpower, Experis and ManpowerGroup Solutions, including permanent, temporary and contract recruitment, assessment and selection, training and outsourcing. The Company’s Right Management segment provides talent and career management workforce solutions. The Company provides services under its Experis brand, particularly in the areas of information technology (IT), engineering and finance.

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