Healthcare Services Group (NASDAQ:HCSG) versus SGS (OTCMKTS:SGSOY) Financial Analysis

Healthcare Services Group (NASDAQ:HCSG) and SGS (OTCMKTS:SGSOY) are both business services companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, analyst recommendations, institutional ownership, valuation, earnings and profitability.

Profitability

This table compares Healthcare Services Group and SGS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Healthcare Services Group	2.20%	12.23%	7.52%
SGS	N/A	N/A	N/A

Risk and Volatility

Healthcare Services Group has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500. Comparatively, SGS has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500.

Institutional and Insider Ownership

98.0% of Healthcare Services Group shares are held by institutional investors. 2.1% of Healthcare Services Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Healthcare Services Group and SGS”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Healthcare Services Group	$1.72 billion	0.79	$39.47 million	$0.54	35.63
SGS	$7.72 billion	2.98	$659.96 million	N/A	N/A

SGS has higher revenue and earnings than Healthcare Services Group.

Analyst Recommendations

This is a summary of current recommendations for Healthcare Services Group and SGS, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Healthcare Services Group	0	4	3	0	2.43
SGS	1	2	1	3	2.86

Healthcare Services Group presently has a consensus price target of $19.40, indicating a potential upside of 0.83%. Given Healthcare Services Group’s higher possible upside, analysts clearly believe Healthcare Services Group is more favorable than SGS.

Summary

Healthcare Services Group beats SGS on 7 of the 12 factors compared between the two stocks.

About Healthcare Services Group

Healthcare Services Group, Inc. provides management, administrative, and operating services to the housekeeping, laundry, linen, facility maintenance, and dietary service departments of nursing homes, retirement complexes, rehabilitation centers, and hospitals in the United States. It operates through two segments, Housekeeping and Dietary. The Housekeeping segment engages in the cleaning, disinfecting, and sanitizing of resident rooms and common areas of the customers' facilities, as well as laundering and processing of the bed linens, uniforms, resident personal clothing, and other assorted linen items utilized at the customers' facilities. The Dietary segment provides food purchasing, meal preparation, and professional dietitian services, which include the development of menus that meet the dietary needs of residents; and on-site management and clinical consulting services to facilities. It serves long-term and post-acute care facilities, hospitals, and the healthcare industry through referrals and solicitation of target facilities. The company was incorporated in 1976 and is based in Bensalem, 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.