Willdan Group (NASDAQ: WLDN) and WageWorks (NYSE:WAGE) are both construction companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, dividends, earnings, institutional ownership and valuation.

Analyst Ratings

This is a breakdown of recent ratings for Willdan Group and WageWorks, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Willdan Group 0 0 3 0 3.00
WageWorks 0 1 4 0 2.80

Willdan Group currently has a consensus target price of $37.67, indicating a potential upside of 45.54%. WageWorks has a consensus target price of $80.30, indicating a potential upside of 30.36%. Given Willdan Group’s stronger consensus rating and higher possible upside, research analysts clearly believe Willdan Group is more favorable than WageWorks.

Risk and Volatility

Willdan Group has a beta of 1.17, meaning that its stock price is 17% more volatile than the S&P 500. Comparatively, WageWorks has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500.

Profitability

This table compares Willdan Group and WageWorks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Willdan Group 3.90% 19.09% 9.02%
WageWorks 9.60% 9.52% 3.30%

Earnings & Valuation

This table compares Willdan Group and WageWorks’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Willdan Group $208.94 million 1.09 $8.29 million $1.15 22.50
WageWorks $364.71 million 6.71 $20.20 million $1.09 56.51

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

Insider & Institutional Ownership

59.6% of Willdan Group shares are owned by institutional investors. 13.3% of Willdan Group shares are owned by company insiders. Comparatively, 3.5% of WageWorks shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Willdan Group beats WageWorks on 8 of the 14 factors compared between the two stocks.

About Willdan Group

Willdan Group, Inc. is a holding company. The Company provides professional technical and consulting services to utilities, private industry and public agencies at all levels of government, primarily in California and New York. It operates through four segments: Energy Efficiency Services, Engineering Services, Public Finance Services and Homeland Security Services. The Energy Efficiency Services segment provides energy efficiency consulting services to utilities, state agencies, municipalities, private industry and non-profit organizations. The Engineering Services segment offers a range of engineering and planning services to its public and private sector clients. The Public Finance Services segment provides support for the various financing techniques employed by public agencies to finance their operations and infrastructure. The Homeland Security Services segment provides national preparedness, homeland security consulting, public safety and emergency response services.

About WageWorks

WageWorks, Inc. is engaged in administering Consumer-Directed Benefits (CDBs). The Company administers CBDs, including pre-tax spending accounts, such as Health Savings Accounts (HSAs), health and dependent care Flexible Spending Accounts (FSAs), and Health Reimbursement Arrangements (HRAs), as well as Commuter Benefit Services, including transit and parking programs, wellness programs, Consolidated Omnibus Budget Reconciliation Act (COBRA) and other employee benefits. Its CDB programs assist employees and their families in saving money by using pre-tax dollars to pay for certain of their healthcare, dependent care and commuter expenses. Employers financially benefit from its programs through reduced payroll taxes. It provides operational support services to its clients and its cross-functional teams, including customer support and claims processing. It administers HSAs for employers that allow employee participants to invest funds to be used for qualified healthcare expenses.

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