Critical Contrast: Booz Allen Hamilton (NYSE:BAH) & TriNet Group (NYSE:TNET)

Booz Allen Hamilton (NYSE:BAH) and TriNet Group (NYSE:TNET) are both industrials companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, risk, profitability, dividends and valuation.

Dividends

Booz Allen Hamilton pays an annual dividend of $2.36 per share and has a dividend yield of 2.7%. TriNet Group pays an annual dividend of $1.16 per share and has a dividend yield of 1.8%. Booz Allen Hamilton pays out 36.6% of its earnings in the form of a dividend. TriNet Group pays out 31.4% 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. Booz Allen Hamilton has raised its dividend for 14 consecutive years and TriNet Group has raised its dividend for 1 consecutive years. Booz Allen Hamilton is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Booz Allen Hamilton has a beta of 0.28, suggesting that its share price is 72% less volatile than the S&P 500. Comparatively, TriNet Group has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500.

Institutional and Insider Ownership

91.8% of Booz Allen Hamilton shares are held by institutional investors. Comparatively, 96.8% of TriNet Group shares are held by institutional investors. 1.1% of Booz Allen Hamilton shares are held by insiders. Comparatively, 40.0% of TriNet Group shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings for Booz Allen Hamilton and TriNet Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Booz Allen Hamilton	3	7	5	0	2.13
TriNet Group	1	5	1	0	2.00

Booz Allen Hamilton presently has a consensus target price of $89.71, indicating a potential upside of 4.06%. TriNet Group has a consensus target price of $60.83, indicating a potential downside of 7.45%. Given Booz Allen Hamilton’s stronger consensus rating and higher possible upside, analysts clearly believe Booz Allen Hamilton is more favorable than TriNet Group.

Valuation and Earnings

This table compares Booz Allen Hamilton and TriNet Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Booz Allen Hamilton	$11.22 billion	0.91	$851.00 million	$6.44	13.39
TriNet Group	$5.01 billion	0.60	$155.00 million	$3.69	17.81

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

Profitability

This table compares Booz Allen Hamilton and TriNet Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Booz Allen Hamilton	7.14%	75.00%	11.41%
TriNet Group	3.56%	202.90%	5.74%

Summary

Booz Allen Hamilton beats TriNet Group on 11 of the 17 factors compared between the two stocks.

About Booz Allen Hamilton

Booz Allen Hamilton is a management and technology consulting firm that helps government and commercial clients address complex operational and technical challenges. Its services include strategy and organizational consulting, digital transformation, systems engineering, data analytics, artificial intelligence, and cybersecurity. The company has a substantial focus on U.S. federal government work, supporting defense, intelligence, and civilian agencies on national security and public-sector missions.

About TriNet Group

TriNet Group, Inc. provides human resources solutions to small and midsize businesses in the United States. Through a professional employer organization (PEO) model, the company helps clients manage employment-related administration and access services that may otherwise be difficult to provide in-house. Its offerings include payroll processing and tax administration, employee benefits, workers’ compensation and risk management, and support with employment-related compliance. TriNet also provides HR technology and guidance intended to help businesses manage employee information and workplace processes.