UL Solutions (NYSE:ULS) vs. Healthcare Services Group (NASDAQ:HCSG) Financial Contrast

UL Solutions (NYSE:ULS) and Healthcare Services Group (NASDAQ:HCSG) are both business services companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.

Analyst Recommendations

This is a breakdown of recent recommendations for UL Solutions and Healthcare Services Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UL Solutions	0	5	3	0	2.38
Healthcare Services Group	0	3	3	0	2.50

UL Solutions presently has a consensus target price of $81.71, indicating a potential downside of 4.64%. Healthcare Services Group has a consensus target price of $19.25, indicating a potential upside of 6.57%. Given Healthcare Services Group’s stronger consensus rating and higher probable upside, analysts clearly believe Healthcare Services Group is more favorable than UL Solutions.

Earnings & Valuation

This table compares UL Solutions and Healthcare Services Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UL Solutions	$2.87 billion	6.00	$326.00 million	$1.62	52.89
Healthcare Services Group	$1.81 billion	0.70	$39.47 million	$0.54	33.45

UL Solutions has higher revenue and earnings than Healthcare Services Group. Healthcare Services Group is trading at a lower price-to-earnings ratio than UL Solutions, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares UL Solutions and Healthcare Services Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
UL Solutions	11.08%	37.33%	12.76%
Healthcare Services Group	2.20%	12.23%	7.52%

Institutional & Insider Ownership

98.0% of Healthcare Services Group shares are held by institutional investors. 1.2% of UL Solutions shares are held by insiders. Comparatively, 2.6% of Healthcare Services Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

UL Solutions pays an annual dividend of $0.52 per share and has a dividend yield of 0.6%. Healthcare Services Group pays an annual dividend of $0.86 per share and has a dividend yield of 4.8%. UL Solutions pays out 32.1% of its earnings in the form of a dividend. Healthcare Services Group pays out 159.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk & Volatility

UL Solutions has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500. Comparatively, Healthcare Services Group has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500.

Summary

UL Solutions beats Healthcare Services Group on 10 of the 15 factors compared between the two stocks.

About UL Solutions

UL Solutions Inc. provides safety science services worldwide. It operates through three segments: Industrial, Consumer, and Software and Advisory. The Industrial segment provides testing, inspection, and certification services across various end markets, including energy, industrial automation, engineered materials, and built environment, as well as stakeholders, such as manufacturers, building owners, end users, and regulators. The Consumer segment offers safety certification testing, ongoing certification, global market access, testing for connectivity, performance and quality, and critical systems advisory and training services, as well as product market acceptance and risk mitigation services for customers in the consumer products end markets comprising consumer electronics, medical devices, information technologies, appliances, HVAC, lighting, and retail, as well as consumer applications, such as new mobility, smart products, and 5G. The Software and Advisory segment provide software and technical advisory services that enable customers to manage regulatory requirements, deliver supply chain transparency, and operationalize sustainability for regulated industries, including life sciences, supply chain regulations, transparency needs, and new ESG and sustainability requirements. It offers ULTRUS software brand to help customers improve speed to market, sustainability and safety. UL Solutions Inc. was formerly known as UL Inc. and changed its name to UL Solutions Inc. in June 2022. The company was founded in 1894 and is headquartered in Northbrook, Illinois with additional offices in North America, Asia Pacific, Africa, Europe, Latin America, and Middle East. UL Solutions Inc. operates as a subsidiary of ULSE Inc.

About Healthcare Services Group

Healthcare Services Group, Inc. provides management, administrative, and operating services to the housekeeping, laundry, linen, facility maintenance, and dietary service departments of nursing homes, retirement complexes, rehabilitation centers, and hospitals in the United States. It operates through two segments, Housekeeping and Dietary. The Housekeeping segment engages in the cleaning, disinfecting, and sanitizing of resident rooms and common areas of the customers' facilities, as well as laundering and processing of the bed linens, uniforms, resident personal clothing, and other assorted linen items utilized at the customers' facilities. The Dietary segment provides food purchasing, meal preparation, and professional dietitian services, which include the development of menus that meet the dietary needs of residents; and on-site management and clinical consulting services to facilities. It serves long-term and post-acute care facilities, hospitals, and the healthcare industry through referrals and solicitation of target facilities. The company was incorporated in 1976 and is based in Bensalem, Pennsylvania.