Vectrus (NYSE: VEC) and Unifirst (NYSE:UNF) are both business services companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, profitability, earnings, dividends, analyst recommendations and institutional ownership.

Dividends

Unifirst pays an annual dividend of $0.15 per share and has a dividend yield of 0.1%. Vectrus does not pay a dividend. Unifirst pays out 4.4% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current recommendations for Vectrus and Unifirst, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vectrus 0 1 1 0 2.50
Unifirst 0 2 1 0 2.33

Vectrus presently has a consensus target price of $37.00, indicating a potential upside of 14.69%. Unifirst has a consensus target price of $171.00, indicating a potential upside of 1.21%. Given Vectrus’ stronger consensus rating and higher probable upside, analysts clearly believe Vectrus is more favorable than Unifirst.

Risk & Volatility

Vectrus has a beta of 2.17, indicating that its stock price is 117% more volatile than the S&P 500. Comparatively, Unifirst has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500.

Profitability

This table compares Vectrus and Unifirst’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vectrus 2.02% 17.25% 4.79%
Unifirst 4.40% 7.53% 6.06%

Insider & Institutional Ownership

86.6% of Vectrus shares are held by institutional investors. Comparatively, 74.1% of Unifirst shares are held by institutional investors. 3.9% of Vectrus shares are held by insiders. Comparatively, 1.0% of Unifirst shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Vectrus and Unifirst’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Vectrus $1.19 billion 0.30 $23.65 million $1.81 17.82
Unifirst $1.59 billion 2.15 $70.19 million $3.43 49.26

Unifirst has higher revenue and earnings than Vectrus. Vectrus is trading at a lower price-to-earnings ratio than Unifirst, indicating that it is currently the more affordable of the two stocks.

Summary

Unifirst beats Vectrus on 8 of the 15 factors compared between the two stocks.

Vectrus Company Profile

Vectrus, Inc. is a provider of services to the United States Government across the world. The Company offers services, including infrastructure asset management, logistics and supply chain management, and information technology and network communication. Its infrastructure asset management services support the United States Army, Air Force and Navy, and include infrastructure services, security, warehouse management and distribution, ammunition management, civil engineering, air base maintenance and operations, communications, emergency services, transportation, and life support activities at various global military installations. Its logistics and supply chain management services support and maintain the vehicle and equipment stocks of the United States Army and Marine Corps. Its information technology and network communication services consist of sustainment of communications systems, network security, systems installation and life cycle management of information technology systems.

Unifirst Company Profile

UniFirst Corporation is a provider of workplace uniforms and protective work wear clothing in the United States. The Company designs, manufactures, personalizes, rents, cleans, delivers, and sells a range of uniforms and protective clothing, including shirts, pants, jackets, coveralls, lab coats, smocks, aprons and specialized protective wear, such as flame resistant and high visibility garments. It operates in six segments: the US Rental and Cleaning, Canadian Rental and Cleaning, Manufacturing (MFG), Specialty Garments Rental and Cleaning (Specialty Garments), First Aid and Corporate. The Company also rents and sells industrial wiping products, floor mats, facility service products and other non-garment items, and provides restroom and cleaning supplies and first aid cabinet services, and other safety supplies. It also decontaminates and cleans work clothes, which has been exposed to radioactive materials and service special cleanroom protective wear and facilities.

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