Financial Contrast: Equifax (NYSE:EFX) & The Hackett Group (NASDAQ:HCKT)

Equifax (NYSE:EFX) and The Hackett Group (NASDAQ:HCKT) are both business services companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, earnings and profitability.

Risk and Volatility

Equifax has a beta of 1.6, suggesting that its share price is 60% more volatile than the S&P 500. Comparatively, The Hackett Group has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500.

Dividends

Equifax pays an annual dividend of $2.00 per share and has a dividend yield of 0.8%. The Hackett Group pays an annual dividend of $0.48 per share and has a dividend yield of 2.1%. Equifax pays out 40.9% of its earnings in the form of a dividend. The Hackett Group pays out 56.5% 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. Equifax has increased its dividend for 1 consecutive years and The Hackett Group has increased its dividend for 1 consecutive years.

Insider & Institutional Ownership

96.2% of Equifax shares are held by institutional investors. Comparatively, 78.1% of The Hackett Group shares are held by institutional investors. 1.4% of Equifax shares are held by insiders. Comparatively, 9.5% of The Hackett Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings for Equifax and The Hackett Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equifax	0	7	12	1	2.70
The Hackett Group	0	1	3	0	2.75

Equifax currently has a consensus target price of $295.50, indicating a potential upside of 12.23%. The Hackett Group has a consensus target price of $31.33, indicating a potential upside of 34.36%. Given The Hackett Group’s stronger consensus rating and higher possible upside, analysts plainly believe The Hackett Group is more favorable than Equifax.

Valuation & Earnings

This table compares Equifax and The Hackett Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equifax	$5.68 billion	5.76	$604.10 million	$4.89	53.85
The Hackett Group	$313.86 million	2.06	$29.63 million	$0.85	27.44

Equifax has higher revenue and earnings than The Hackett Group. The Hackett Group is trading at a lower price-to-earnings ratio than Equifax, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Equifax and The Hackett Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Equifax	10.68%	18.81%	7.60%
The Hackett Group	7.64%	30.51%	17.74%

Summary

Equifax beats The Hackett Group on 11 of the 17 factors compared between the two stocks.

About Equifax

Equifax Inc. operates as a data, analytics, and technology company. The company operates through three segments: Workforce Solutions, U.S. Information Solutions (USIS), and International. The Workforce Solutions segment offers services that enables customers to verify income, employment, educational history, criminal justice data, healthcare professional licensure, and sanctions of people in the United States; and employer customers with services that assist them in complying with and automating payroll-related and human resource management processes throughout the entire cycle of the employment relationship. The USIS segment provides consumer and commercial information services, such as credit information and credit scoring, credit modeling and portfolio analytics, locate, fraud detection and prevention, identity verification, and other consulting services; mortgage services; financial marketing services; identity management services; and credit monitoring products. The International segment offers information service products, which include consumer and commercial services, such as credit and financial information, and credit scoring and modeling; and credit and other marketing products and services, as well as offers information, technology, and other services to support debt collections and recovery management. The company serves customers in financial services, mortgage, retail, telecommunications, utilities, automotive, brokerage, healthcare, and insurance industries, as well as government agencies. It operates in Argentina, Australia, Brazil, Canada, Chile, Costa Rica, Dominican Republic, Ecuador, El Salvador, Honduras, India, Ireland, Mexico, New Zealand, Paraguay, Peru, Portugal, Spain, the United Kingdom, Uruguay, and the United States. The company was founded in 1899 and is headquartered in Atlanta, Georgia.

About The Hackett Group

The Hackett Group, Inc. operates as an intellectual property-based executive advisory, strategic consulting, and digital transformation company in the United States, Europe, and internationally. The company operates through three segments: Global Strategy & Business Transformation, Oracle Solutions, and SAP Solutions. It offers Hackett Connect, an online searchable repository; best practice accelerators that provide web-based access to best practices, customized software configuration tools, and best practice process flows; advisor inquiry for access to fact-based advice on proven approaches and methods; best practice research that provides insights into the proven approaches; and peer interaction comprising member-led webcasts, annual best practice conferences, annual member forums, membership performance surveys, and client-submitted content, as well as IP-as-a-service and Hackett Institute programs. The company also provides benchmarking services that conduct studies for selling, general and administrative, finance, human resources, information technology, procurement, enterprise performance management, and shared services; and business transformation practices which help clients develop a coordinated digital transformation strategy. In addition, it offers oracle solutions that help clients to choose and deploy oracle applications that best meet their needs and objectives. Further, the company provides SAP solutions, including planning, architecture, and vendor evaluation and selection through implementation, customization, testing, and integration; post-implementation support, change and exception management, process transparency, system documentation, and end-user training; and off-shore application development, and application maintenance and support services. The company was formerly known as Answerthink, Inc. and changed its name to The Hackett Group, Inc. in 2008. The Hackett Group, Inc. was founded in 1991 and is headquartered in Miami, Florida.