Crawford & Company (NYSE:CRD.B) & SPS Commerce (NASDAQ:SPSC) Critical Comparison

Crawford & Company (NYSE:CRD.B) and SPS Commerce (NASDAQ:SPSC) are both business services companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.

Institutional and Insider Ownership

11.0% of Crawford & Company shares are owned by institutional investors. Comparatively, 99.0% of SPS Commerce shares are owned by institutional investors. 51.0% of Crawford & Company shares are owned by insiders. Comparatively, 1.0% of SPS Commerce shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Crawford & Company and SPS Commerce, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Crawford & Company	0	0	0	0	0.00
SPS Commerce	1	8	2	1	2.25

SPS Commerce has a consensus price target of $106.80, suggesting a potential upside of 29.75%. Given SPS Commerce’s stronger consensus rating and higher possible upside, analysts clearly believe SPS Commerce is more favorable than Crawford & Company.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Crawford & Company	2.18%	25.91%	5.26%
SPS Commerce	11.79%	12.10%	10.08%

Volatility and Risk

Crawford & Company has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500. Comparatively, SPS Commerce has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500.

Valuation & Earnings

This table compares Crawford & Company and SPS Commerce”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Crawford & Company	$1.34 billion	0.40	$26.60 million	$0.59	18.25
SPS Commerce	$729.76 million	4.25	$77.05 million	$2.23	36.91

SPS Commerce has lower revenue, but higher earnings than Crawford & Company. Crawford & Company is trading at a lower price-to-earnings ratio than SPS Commerce, indicating that it is currently the more affordable of the two stocks.

Summary

SPS Commerce beats Crawford & Company on 11 of the 15 factors compared between the two stocks.

About Crawford & Company

Crawford & Co. engages in the provision of claims management and outsourcing solutions to carriers, brokers, and corporates. It operates through the following segments: Crawford Loss Adjusting, Crawford TPA Solutions, and Crawford Platform Solutions. The Crawford Loss Adjusting segment consists of adjusting services provided to insurance companies and self-insured entities related to property and casualty losses caused by physical damage to commercial and residential real property and certain types of personal property. The Crawford TPA Solutions segment provides third party administration for workers’ compensation, auto and liability, disability absence management, medical management, and accident and health to corporations, brokers, and insurers worldwide. The Crawford Platform Solutions segment is involved in the management of contractor networks and the provision of claims management services to insurance companies and self-insured entities related to property, casualty, and catastrophic losses. The company was founded by Jim Crawford in 1941 and is headquartered in Peachtree Corners, GA.

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.