Reviewing Sodexo (OTCMKTS:SDXAY) and SPS Commerce (NASDAQ:SPSC)

SPS Commerce (NASDAQ:SPSC) and Sodexo (OTCMKTS:SDXAY) are both mid-cap business services companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, risk, earnings and dividends.

Profitability

This table compares SPS Commerce and Sodexo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SPS Commerce	11.79%	12.10%	10.08%
Sodexo	N/A	N/A	N/A

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for SPS Commerce and Sodexo, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SPS Commerce	1	8	2	1	2.25
Sodexo	2	7	0	0	1.78

SPS Commerce currently has a consensus price target of $106.80, suggesting a potential upside of 31.67%. Given SPS Commerce’s stronger consensus rating and higher possible upside, analysts clearly believe SPS Commerce is more favorable than Sodexo.

Earnings & Valuation

This table compares SPS Commerce and Sodexo”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SPS Commerce	$729.76 million	4.19	$77.05 million	$2.23	36.37
Sodexo	$26.49 billion	0.30	$765.33 million	N/A	N/A

Sodexo has higher revenue and earnings than SPS Commerce.

Volatility and Risk

SPS Commerce has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, Sodexo has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500.

Institutional & Insider Ownership

99.0% of SPS Commerce shares are held by institutional investors. 1.0% of SPS Commerce shares are held by insiders. Comparatively, 1.0% of Sodexo shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

SPS Commerce beats Sodexo on 9 of the 13 factors compared between the two stocks.

About SPS Commerce

SPS Commerce, Inc. provides cloud-based supply chain management solutions in the United States and internationally. It offers solutions through the SPS Commerce, a cloud-based platform that enhances the way retailers, grocers, suppliers, distributors, and logistics firms manage and fulfill omnichannel orders, optimize sell-through performance, and automate new trading relationships. The company also provides Fulfillment, an electronic data interchange solution that scales as a business grows, where companies use a single system to manage orders and logistics from various sales channels, including wholesale, eCommerce, and marketplaces; and Analytics product that enables organizations to enhance visibility into how products are selling through a single connection across various sales channels, including wholesale, eCommerce, and marketplaces, as well as enhances access and usage of sales and inventory data through a combination of analytics applications, network of connections, and industry-leading expertise. In addition, it offers various complimentary products, such as assortment product, which simplifies the communication of robust, accurate item data by automatically translating item attributes, and hierarchies; and community product that allows organizations to accelerate digitization of their supply chain and improve collaboration with suppliers through change management and onboarding programs. The company was formerly known as St. Paul Software, Inc. and changed its name to SPS Commerce, Inc. in May 2001. SPS Commerce, Inc. was incorporated in 1987 and is headquartered in Minneapolis, Minnesota.

About Sodexo

Sodexo S.A. provides food services and facilities management services worldwide. It offers various on-site services, which includes corporate services, energy and resources, government and agencies, and other services; healthcare and seniors; and learning solutions to schools and universities. The company also provides food services comprising retail service, food delivery, and meal and food vouchers, as well as digital food ordering services; savings and purchase solutions, data and digital tools, and advisory services and client support; and work-life balance and employee experience solutions. In addition, it offers facility management services, including technical service management, assets management, building maintenance, access control, deep cleaning, energy management, space planning, project management, front-of-house services, grounds maintenance, waste management, HVAC systems, mail management, commercial cleaning, workspace management, and pest control. services. The company was formerly known as Sodexho Alliance and changed its name to Sodexo S.A. in 2008. Sodexo S.A. was founded in 1966 and is headquartered in Issy-les-Moulineaux, France.