Reviewing Insperity (NYSE:NSP) & Jacobs Solutions (NYSE:J)

Jacobs Solutions (NYSE:J) and Insperity (NYSE:NSP) are both industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.

Risk and Volatility

Jacobs Solutions has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500. Comparatively, Insperity has a beta of 0.48, suggesting that its share price is 52% less volatile than the S&P 500.

Dividends

Jacobs Solutions pays an annual dividend of $1.44 per share and has a dividend yield of 0.9%. Insperity pays an annual dividend of $2.40 per share and has a dividend yield of 4.8%. Jacobs Solutions pays out 51.1% of its earnings in the form of a dividend. Insperity pays out 3,000.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Jacobs Solutions has increased its dividend for 4 consecutive years and Insperity has increased its dividend for 14 consecutive years. Insperity is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Jacobs Solutions and Insperity, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Jacobs Solutions	0	6	5	0	2.45
Insperity	2	2	1	0	1.80

Jacobs Solutions presently has a consensus price target of $156.78, suggesting a potential downside of 1.78%. Insperity has a consensus price target of $53.33, suggesting a potential upside of 6.49%. Given Insperity’s higher probable upside, analysts clearly believe Insperity is more favorable than Jacobs Solutions.

Earnings & Valuation

This table compares Jacobs Solutions and Insperity”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Jacobs Solutions	$12.03 billion	1.57	$289.34 million	$2.82	56.60
Insperity	$6.81 billion	0.28	-$7.00 million	$0.08	626.05

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

Profitability

This table compares Jacobs Solutions and Insperity’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Jacobs Solutions	2.40%	23.96%	7.02%
Insperity	0.04%	18.27%	0.45%

Insider & Institutional Ownership

85.7% of Jacobs Solutions shares are held by institutional investors. Comparatively, 93.4% of Insperity shares are held by institutional investors. 0.5% of Jacobs Solutions shares are held by insiders. Comparatively, 5.8% of Insperity shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Jacobs Solutions beats Insperity on 11 of the 17 factors compared between the two stocks.

About Jacobs Solutions

Jacobs Solutions Inc. provides consulting, technical, engineering, scientific, and project delivery services for the government and private sectors in the United States, Europe, Canada, India, Asia, Australia, New Zealand, the Middle East, and Africa. It operates through Critical Mission Solutions, People & Places Solutions, Divergent Solutions, and PA Consulting segments. The company offers cyber, data analytics, systems and software application integration and consulting, enterprise level and mission IT, design, nuclear, and enterprise level operations and maintenance services; software development, testing, mission integration, program management, research, development, test, evaluation services, training, and environmental remediation services; and other technical consulting solutions, as well as construction and construction management services. It also provides consulting services for consumer and manufacturing, defense and security, energy and utilities, financial services, government, health and life sciences, and transport industries. The company was founded in 1947 and is headquartered in Dallas, Texas.

About Insperity

Insperity, Inc. engages in the provision of human resources (HR) and business solutions to improve business performance for small and medium-sized businesses primarily in the United States. It offers its HR services through its workforce optimization and workforce synchronization solutions that include a range of human resources functions, such as payroll and employment administration, employee benefits, workers' compensation, government compliance, performance management, and training and development services. The company also provides Insperity Premier, a cloud-based human capital management platform that offers professional employer organization HR outsourcing solutions to its clients; people management services; and employer liability management services, as well as solutions for middle market. In addition, it offers MarketPlace, an e-commerce portal that offers a range of products and services; and Workforce Acceleration, a human capital management and payroll services solution; integrated payroll; benefits administration; HR administration and employee onboarding; time and attendance; performance management; reporting and analytics; recruiting; employment screening; retirement; and insurance services. The company was formerly known as Administaff, Inc. and changed its name to Insperity, Inc. in March 2011. Insperity, Inc. was founded in 1986 and is headquartered in Kingwood, Texas.