SGS (OTCMKTS:SGSOY) and ABM Industries (NYSE:ABM) Financial Analysis

ABM Industries (NYSE:ABM) and SGS (OTCMKTS:SGSOY) are both business services companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, analyst recommendations, valuation, profitability, earnings and dividends.

Analyst Ratings

This is a breakdown of current ratings for ABM Industries and SGS, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ABM Industries	0	3	2	0	2.40
SGS	0	2	1	3	3.17

ABM Industries currently has a consensus price target of $55.67, indicating a potential upside of 38.25%. Given ABM Industries’ higher probable upside, equities analysts clearly believe ABM Industries is more favorable than SGS.

Dividends

ABM Industries pays an annual dividend of $1.06 per share and has a dividend yield of 2.6%. SGS pays an annual dividend of $0.18 per share and has a dividend yield of 1.6%. ABM Industries pays out 57.6% of its earnings in the form of a dividend. ABM Industries has increased its dividend for 59 consecutive years. ABM Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares ABM Industries and SGS”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ABM Industries	$8.63 billion	0.29	$81.40 million	$1.84	21.88
SGS	$7.72 billion	2.85	$659.96 million	N/A	N/A

SGS has lower revenue, but higher earnings than ABM Industries.

Profitability

This table compares ABM Industries and SGS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ABM Industries	1.34%	12.12%	4.18%
SGS	N/A	N/A	N/A

Risk & Volatility

ABM Industries has a beta of 0.76, meaning that its stock price is 24% less volatile than the S&P 500. Comparatively, SGS has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500.

Institutional and Insider Ownership

91.6% of ABM Industries shares are owned by institutional investors. 0.9% of ABM Industries shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

ABM Industries beats SGS on 10 of the 16 factors compared between the two stocks.

About ABM Industries

ABM Industries Incorporated, through its subsidiaries, engages in the provision of integrated facility, infrastructure, and mobility solutions in the United States and internationally. It operates through Business & Industry, Manufacturing & Distribution, Education, Aviation, and Technical Solutions segments. The company offers janitorial, facilities engineering, and parking services for commercial real estate properties, including corporate offices for high tech clients, sports and entertainment venues, and traditional hospitals and non-acute healthcare facilities; provides vehicle maintenance and other services to rental car providers. It also offers integrated facility services, engineering, and other specialized services in various types of manufacturing, distribution, and data center facilities. In addition, the company delivers custodial and landscaping and grounds for public school districts, private schools, colleges, and universities. Further, it supports airlines and airports with services comprising passenger assistance, catering logistics, air cabin maintenance, and transportation services. Additionally, the company provides electric vehicle power design, installation, and maintenance, as well as microgrid systems installations. ABM Industries Incorporated was founded in 1909 and is headquartered in New York, New York.

About SGS

SGS SA provides inspection, testing, and verification services in Europe, Africa, the Middle East, the Americas, and the Asia Pacific. It operates in five segments: Connectivity & Products, Health & Nutrition, Industries & Environment, Natural Resources, and Business Assurance. The company provides laboratory testing, product inspection and consulting, process assessment, technical and transactional assistance; and automotive, connectivity, softlines and accessories, and hardgoods, toys, and juvenile products, as well as government and trade facilitation services. In addition, it offers a range of testing, inspection and certification solutions for the crop science, food, health science, and cosmetics and hygiene industries; field services, technical assessment, and advisory services; and services related to industrial, public health and safety, environmental testing, and public mandates. Further, it provides assessment, auditing, and certification, supply chain assurance, training, consulting, and sustainability assurance services; agricultural commodities, geochemistry, laboratory testing petroleum and chemicals, metallurgy and consulting, mineral and metal commodities, and oil, gas, and chemical commodities; and sustainability solutions. The company serves the agriculture and food, chemical, construction, consumer and retail, energy, industrial manufacturing, life sciences, mining, oil and gas, public, and transportation sectors. SGS SA was founded in 1878 and is headquartered in Geneva, Switzerland.