Acacia Research (NASDAQ:ACTG – Get Free Report) and Healthcare Services Group (NASDAQ:HCSG – Get Free Report) are both small-cap business services companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, dividends, valuation and analyst recommendations.
Volatility and Risk
Acacia Research has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500. Comparatively, Healthcare Services Group has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500.
Institutional and Insider Ownership
86.7% of Acacia Research shares are owned by institutional investors. Comparatively, 98.0% of Healthcare Services Group shares are owned by institutional investors. 1.1% of Acacia Research shares are owned by company insiders. Comparatively, 2.1% of Healthcare Services Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Acacia Research | $283.95 million | 1.36 | -$36.06 million | $0.05 | 80.10 |
| Healthcare Services Group | $1.84 billion | 0.80 | $59.06 million | $0.82 | 25.53 |
Healthcare Services Group has higher revenue and earnings than Acacia Research. Healthcare Services Group is trading at a lower price-to-earnings ratio than Acacia Research, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Acacia Research and Healthcare Services Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Acacia Research | 1.70% | 2.45% | 1.80% |
| Healthcare Services Group | 3.21% | 16.04% | 9.94% |
Analyst Ratings
This is a breakdown of recent ratings for Acacia Research and Healthcare Services Group, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Acacia Research | 1 | 0 | 0 | 0 | 1.00 |
| Healthcare Services Group | 0 | 4 | 3 | 0 | 2.43 |
Healthcare Services Group has a consensus price target of $22.00, indicating a potential upside of 5.11%. Given Healthcare Services Group’s stronger consensus rating and higher probable upside, analysts plainly believe Healthcare Services Group is more favorable than Acacia Research.
Summary
Healthcare Services Group beats Acacia Research on 12 of the 14 factors compared between the two stocks.
About Acacia Research
Acacia is a publicly traded (Nasdaq: ACTG) company that is focused on acquiring and operating businesses across the industrial, energy and technology sectors where it believes it can leverage its expertise, significant capital base, and deep industry relationships to drive value. Acacia evaluates opportunities based on the attractiveness of the underlying cash flows, without regard to a specific investment horizon. Acacia operates its businesses based on three key principles of people, process, and performance and has built a management team with demonstrated expertise in research, transactions and execution, and operations and management.
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.
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