Analyzing ABM Industries (NYSE:ABM) and UniFirst (NYSE:UNF)

UniFirst (NYSE:UNF) and ABM Industries (NYSE:ABM) are both mid-cap industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, dividends, profitability, risk and valuation.

Valuation & Earnings

This table compares UniFirst and ABM Industries”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UniFirst	$2.43 billion	1.93	$148.27 million	$6.34	40.91
ABM Industries	$8.75 billion	0.33	$162.30 million	$2.77	17.98

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

Insider and Institutional Ownership

78.2% of UniFirst shares are owned by institutional investors. Comparatively, 91.6% of ABM Industries shares are owned by institutional investors. 0.9% of UniFirst shares are owned by company insiders. Comparatively, 0.9% of ABM Industries shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

UniFirst pays an annual dividend of $1.46 per share and has a dividend yield of 0.6%. ABM Industries pays an annual dividend of $1.16 per share and has a dividend yield of 2.3%. UniFirst pays out 23.0% of its earnings in the form of a dividend. ABM Industries pays out 41.9% 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. UniFirst has raised its dividend for 7 consecutive years and ABM Industries has raised 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.

Analyst Ratings

This is a summary of current recommendations for UniFirst and ABM Industries, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UniFirst	0	4	0	0	2.00
ABM Industries	0	4	1	0	2.20

UniFirst presently has a consensus target price of $246.67, indicating a potential downside of 4.89%. ABM Industries has a consensus target price of $50.88, indicating a potential upside of 2.12%. Given ABM Industries’ stronger consensus rating and higher possible upside, analysts clearly believe ABM Industries is more favorable than UniFirst.

Volatility & Risk

UniFirst has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500. Comparatively, ABM Industries has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
UniFirst	4.65%	6.44%	5.03%
ABM Industries	1.82%	12.46%	4.03%

Summary

ABM Industries beats UniFirst on 11 of the 17 factors compared between the two stocks.

About UniFirst

UniFirst Corporation provides workplace uniforms and protective work wear clothing in the United States, Europe, and Canada. The company operates through U.S. and Canadian Rental and Cleaning, Manufacturing, Specialty Garments Rental and Cleaning, and First Aid segments. It designs, manufactures, personalizes, rents, cleans, delivers, and sells a range of uniforms and protective clothing, including shirts, pants, jackets, coveralls, lab coats, smocks, and aprons; and specialized protective wear, such as flame resistant and high visibility garments. The company also rents and sells industrial wiping products, floor mats, facility service products, and dry and wet mops; restroom and cleaning supplies comprising air fresheners, paper products, gloves, masks, sanitizers, and hand soaps; and other textile products. In addition, it provides first aid cabinet services and other safety supplies; decontaminates and cleans work clothes, and other items that is exposed to radioactive materials; and services special cleanroom protective wear and facilities. Further, it offers a range of garment service options, including full-service rental programs in which garments are cleaned and serviced; lease programs in which garments are cleaned and maintained by individual employees; and purchase programs to buy garments and related items directly. The company serves automobile service centers and dealers, delivery services, food and general merchandise retailers, food processors and service operations, light manufacturers, maintenance facilities, restaurants, service companies, soft and durable goods wholesalers, transportation companies, healthcare providers, government agencies, research and development laboratories, high technology companies, and utilities operating nuclear reactors, as well as others who require employee clothing for image, identification, protection, or utility purposes. UniFirst Corporation was founded in 1936 and is headquartered in Wilmington, Massachusetts.

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.