Critical Analysis: UniFirst (UNF) vs. Its Competitors

UniFirst (NYSE:UNF) is one of 354 public companies in the “Commercial Services & Supplies” industry, but how does it weigh in compared to its peers? We will compare UniFirst to related businesses based on the strength of its risk, institutional ownership, valuation, analyst recommendations, earnings, profitability and dividends.

Institutional and Insider Ownership

78.2% of UniFirst shares are owned by institutional investors. Comparatively, 39.5% of shares of all “Commercial Services & Supplies” companies are owned by institutional investors. 0.9% of UniFirst shares are owned by company insiders. Comparatively, 17.4% of shares of all “Commercial Services & Supplies” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares UniFirst and its peers revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
UniFirst	$2.52 billion	$109.49 million	39.23
UniFirst Competitors	$2.47 billion	$140.58 million	4.04

UniFirst has higher revenue, but lower earnings than its peers. UniFirst is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares UniFirst and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
UniFirst	4.34%	6.65%	5.19%
UniFirst Competitors	-49.62%	-119.18%	-1.27%

Analyst Ratings

This is a breakdown of current ratings and target prices for UniFirst and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UniFirst	0	3	0	1	2.50
UniFirst Competitors	1915	6260	9053	666	2.47

UniFirst currently has a consensus target price of $246.67, suggesting a potential upside of 4.62%. As a group, “Commercial Services & Supplies” companies have a potential upside of 10.00%. Given UniFirst’s peers higher possible upside, analysts plainly believe UniFirst has less favorable growth aspects than its peers.

Volatility and Risk

UniFirst has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500. Comparatively, UniFirst’s peers have a beta of 2.99, suggesting that their average share price is 199% more volatile than the S&P 500.

Dividends

UniFirst pays an annual dividend of $1.46 per share and has a dividend yield of 0.6%. UniFirst pays out 24.3% of its earnings in the form of a dividend. As a group, “Commercial Services & Supplies” companies pay a dividend yield of 2.5% and pay out 63.7% of their earnings in the form of a dividend. UniFirst has increased its dividend for 7 consecutive years.

Summary

UniFirst beats its peers on 9 of the 15 factors compared.

About UniFirst

UniFirst Corporation provides uniform rental and workplace services to businesses across a range of industries. Its programs include workwear selection, laundering, inspection, repair, and scheduled delivery, as well as sales of uniforms and related apparel. The company also supplies facility services such as floor mats, towels, restroom products, and first aid and safety supplies. Through specialized operations, UniFirst provides cleanroom garments and related services for businesses that require controlled environments.