Aramark (NYSE:ARMK) and Super Group (SGHC) (NYSE:SGHC) Critical Contrast

Aramark (NYSE:ARMK) and Super Group (SGHC) (NYSE:SGHC) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, earnings, risk and analyst recommendations.

Institutional and Insider Ownership

5.1% of Super Group (SGHC) shares are owned by institutional investors. 2.8% of Aramark shares are owned by company insiders. Comparatively, 10.4% of Super Group (SGHC) shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Aramark has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, Super Group (SGHC) has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500.

Dividends

Aramark pays an annual dividend of $0.48 per share and has a dividend yield of 0.8%. Super Group (SGHC) pays an annual dividend of $0.20 per share and has a dividend yield of 1.4%. Aramark pays out 33.6% of its earnings in the form of a dividend. Super Group (SGHC) pays out 27.8% 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. Super Group (SGHC) is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Aramark and Super Group (SGHC)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aramark	1.93%	17.68%	4.21%
Super Group (SGHC)	15.22%	47.37%	29.05%

Analyst Ratings

This is a summary of recent recommendations and price targets for Aramark and Super Group (SGHC), as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aramark	0	2	12	0	2.86
Super Group (SGHC)	0	2	7	0	2.78

Aramark currently has a consensus target price of $69.14, suggesting a potential upside of 21.76%. Super Group (SGHC) has a consensus target price of $18.71, suggesting a potential upside of 32.05%. Given Super Group (SGHC)’s higher possible upside, analysts clearly believe Super Group (SGHC) is more favorable than Aramark.

Earnings and Valuation

This table compares Aramark and Super Group (SGHC)”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aramark	$19.85 billion	0.75	$326.39 million	$1.43	39.71
Super Group (SGHC)	$2.23 billion	3.21	$217.00 million	$0.72	19.68

Aramark has higher revenue and earnings than Super Group (SGHC). Super Group (SGHC) is trading at a lower price-to-earnings ratio than Aramark, indicating that it is currently the more affordable of the two stocks.

Summary

Super Group (SGHC) beats Aramark on 9 of the 17 factors compared between the two stocks.

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 Super Group (SGHC)

Super Group (SGHC) Limited operates as an online sports betting and gaming operator. It offers Betway, an online sports betting brand; and Spin, a multi-brand online casino offering. Super Group (SGHC) Limited is based in Saint Peter Port, Guernsey.