Head to Head Analysis: Aramark (NYSE:ARMK) vs. SGS (OTCMKTS:SGSOY)

Aramark (NYSE:ARMK) and SGS (OTCMKTS:SGSOY) are both business services companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, profitability, risk, earnings, institutional ownership, analyst recommendations and dividends.

Valuation and Earnings

This table compares Aramark and SGS”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aramark	$17.40 billion	0.57	$262.52 million	$1.35	27.84
SGS	$7.72 billion	2.56	$659.96 million	N/A	N/A

SGS has lower revenue, but higher earnings than Aramark.

Profitability

This table compares Aramark and SGS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aramark	2.02%	15.67%	3.67%
SGS	N/A	N/A	N/A

Analyst Recommendations

This is a summary of recent ratings and target prices for Aramark and SGS, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aramark	0	1	8	1	3.00
SGS	0	1	0	3	3.50

Aramark presently has a consensus price target of $45.44, indicating a potential upside of 20.93%. Given Aramark’s higher possible upside, analysts clearly believe Aramark is more favorable than SGS.

Risk and Volatility

Aramark has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500. Comparatively, SGS has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500.

Dividends

Aramark pays an annual dividend of $0.42 per share and has a dividend yield of 1.1%. SGS pays an annual dividend of $0.18 per share and has a dividend yield of 1.8%. Aramark pays out 31.1% of its earnings in the form of a dividend. Aramark has raised its dividend for 1 consecutive years.

Summary

Aramark beats SGS on 8 of the 14 factors compared between the two stocks.

About Aramark

Aramark provides food and facilities services to education, healthcare, business and industry, sports, leisure, and corrections clients in the United States and internationally. It operates through two segments, Food and Support Services United States, and Food and Support Services International. The company offers food-related managed services, including dining, catering, food service management, and convenience-oriented retail services; non-clinical food and food-related support services, such as patient food and nutrition, retail food, environmental services, and procurement services; and plant operations and maintenance, custodial/housekeeping, energy management, grounds keeping, and capital project management services. It also provides on-site restaurants, catering, convenience stores, and executive dining services; beverage and vending services; and facility management services comprising landscaping, transportation, capital program management, payment services, and other facility consulting services relating to building operations. In addition, the company offers concessions, banquet, and catering services; retail services and merchandise sale, recreational, and lodging services; and facility management services at sports, entertainment, and recreational facilities. Further, it offers correctional food; and operates commissaries, laundry facilities, and property rooms. It primarily serves business and industry, sports, leisure and corrections, education, healthcare, public institutions, manufacturing, transportation, service, and other industries. The company was formerly known as ARAMARK Holdings Corporation. Aramark was founded in 1959 and is based in Philadelphia, Pennsylvania.

About SGS

SGS SA provides inspection, testing, and verification services in Europe, Africa, the Middle East, the Americas, and the Asia Pacific. It operates in five segments: Connectivity & Products, Health & Nutrition, Industries & Environment, Natural Resources, and Business Assurance. The company provides laboratory testing, product inspection and consulting, process assessment, technical and transactional assistance; and automotive, connectivity, softlines and accessories, and hardgoods, toys, and juvenile products, as well as government and trade facilitation services. In addition, it offers a range of testing, inspection and certification solutions for the crop science, food, health science, and cosmetics and hygiene industries; field services, technical assessment, and advisory services; and services related to industrial, public health and safety, environmental testing, and public mandates. Further, it provides assessment, auditing, and certification, supply chain assurance, training, consulting, and sustainability assurance services; agricultural commodities, geochemistry, laboratory testing petroleum and chemicals, metallurgy and consulting, mineral and metal commodities, and oil, gas, and chemical commodities; and sustainability solutions. The company serves the agriculture and food, chemical, construction, consumer and retail, energy, industrial manufacturing, life sciences, mining, oil and gas, public, and transportation sectors. SGS SA was founded in 1878 and is headquartered in Geneva, Switzerland.