UL Solutions (ULS) versus Its Competitors Critical Analysis

UL Solutions (NYSE:ULS) is one of 60 public companies in the “BUSINESS SVCS” industry, but how does it weigh in compared to its competitors? We will compare UL Solutions to related businesses based on the strength of its earnings, profitability, risk, valuation, institutional ownership, dividends and analyst recommendations.

Insider & Institutional Ownership

63.3% of shares of all “BUSINESS SVCS” companies are owned by institutional investors. 1.2% of UL Solutions shares are owned by insiders. Comparatively, 15.0% of shares of all “BUSINESS SVCS” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
UL Solutions	11.60%	40.79%	12.99%
UL Solutions Competitors	2.14%	-161.22%	1.26%

Analyst Recommendations

This is a summary of current ratings and price targets for UL Solutions and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UL Solutions	0	5	3	0	2.38
UL Solutions Competitors	197	1103	1851	77	2.56

UL Solutions currently has a consensus target price of $69.43, indicating a potential downside of 1.77%. As a group, “BUSINESS SVCS” companies have a potential upside of 8.29%. Given UL Solutions’ competitors stronger consensus rating and higher probable upside, analysts clearly believe UL Solutions has less favorable growth aspects than its competitors.

Valuation & Earnings

This table compares UL Solutions and its competitors top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
UL Solutions	$2.87 billion	$326.00 million	42.32
UL Solutions Competitors	$4.52 billion	$148.30 million	1.54

UL Solutions’ competitors have higher revenue, but lower earnings than UL Solutions. UL Solutions is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Dividends

UL Solutions pays an annual dividend of $0.52 per share and has a dividend yield of 0.7%. UL Solutions pays out 31.1% of its earnings in the form of a dividend. As a group, “BUSINESS SVCS” companies pay a dividend yield of 1.3% and pay out 44.2% of their earnings in the form of a dividend.

Risk & Volatility

UL Solutions has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500. Comparatively, UL Solutions’ competitors have a beta of 2.50, meaning that their average stock price is 150% more volatile than the S&P 500.

Summary

UL Solutions competitors beat UL Solutions on 9 of the 15 factors compared.

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.