Aramark (NYSE:ARMK) and UL Solutions (NYSE:ULS) Head-To-Head Review

Aramark (NYSE:ARMK) and UL Solutions (NYSE:ULS) are both business services companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, valuation, institutional ownership and dividends.

Profitability

This table compares Aramark and UL Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aramark	2.02%	15.67%	3.67%
UL Solutions	11.29%	34.49%	12.74%

Dividends

Aramark pays an annual dividend of $0.48 per share and has a dividend yield of 1.3%. UL Solutions pays an annual dividend of $0.52 per share and has a dividend yield of 0.6%. Aramark pays out 39.3% of its earnings in the form of a dividend. UL Solutions pays out 31.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Aramark has increased its dividend for 1 consecutive years. Aramark is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Aramark has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500. Comparatively, UL Solutions has a beta of 1.05, meaning that its stock price is 5% more volatile than the S&P 500.

Earnings and Valuation

This table compares Aramark and UL Solutions”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aramark	$18.51 billion	0.53	$262.52 million	$1.22	30.61
UL Solutions	$2.87 billion	6.31	$326.00 million	$1.67	53.98

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

Analyst Ratings

This is a summary of current ratings for Aramark and UL Solutions, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aramark	0	2	4	1	2.86
UL Solutions	0	5	3	0	2.38

Aramark presently has a consensus price target of $45.67, indicating a potential upside of 22.30%. UL Solutions has a consensus price target of $81.71, indicating a potential downside of 9.36%. Given Aramark’s stronger consensus rating and higher possible upside, analysts clearly believe Aramark is more favorable than UL Solutions.

About Aramark

Aramark provides food and facilities services to education, healthcare, business and industry, sports, leisure, and corrections clients in the United States and internationally. It operates through two segments, Food and Support Services United States, and Food and Support Services International. The company offers food-related managed services, including dining, catering, food service management, and convenience-oriented retail services; non-clinical food and food-related support services, such as patient food and nutrition, retail food, environmental services, and procurement services; and plant operations and maintenance, custodial/housekeeping, energy management, grounds keeping, and capital project management services. It also provides on-site restaurants, catering, convenience stores, and executive dining services; beverage and vending services; and facility management services comprising landscaping, transportation, capital program management, payment services, and other facility consulting services relating to building operations. In addition, the company offers concessions, banquet, and catering services; retail services and merchandise sale, recreational, and lodging services; and facility management services at sports, entertainment, and recreational facilities. Further, it offers correctional food; and operates commissaries, laundry facilities, and property rooms. It primarily serves business and industry, sports, leisure and corrections, education, healthcare, public institutions, manufacturing, transportation, service, and other industries. The company was formerly known as ARAMARK Holdings Corporation. Aramark was founded in 1959 and is based in Philadelphia, Pennsylvania.

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.