Healthcare Services Group (NASDAQ:HCSG – Get Free Report) and Acacia Research (NASDAQ:ACTG – Get Free Report) are both small-cap business services companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, valuation, analyst recommendations, earnings, institutional ownership and profitability.
Profitability
This table compares Healthcare Services Group and Acacia Research’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Healthcare Services Group | 3.21% | 16.04% | 9.94% |
| Acacia Research | 1.70% | 2.45% | 1.80% |
Valuation and Earnings
This table compares Healthcare Services Group and Acacia Research”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Healthcare Services Group | $1.84 billion | 0.80 | $59.06 million | $0.82 | 25.53 |
| Acacia Research | $283.95 million | 1.36 | -$36.06 million | $0.05 | 80.10 |
Healthcare Services Group has higher revenue and earnings than Acacia Research. Healthcare Services Group is trading at a lower price-to-earnings ratio than Acacia Research, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Healthcare Services Group has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500. Comparatively, Acacia Research has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500.
Analyst Ratings
This is a summary of current ratings and recommmendations for Healthcare Services Group and Acacia Research, 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 |
| Acacia Research | 1 | 0 | 0 | 0 | 1.00 |
Healthcare Services Group presently has a consensus price target of $22.00, suggesting a potential upside of 5.11%. Given Healthcare Services Group’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Healthcare Services Group is more favorable than Acacia Research.
Insider and Institutional Ownership
98.0% of Healthcare Services Group shares are held by institutional investors. Comparatively, 86.7% of Acacia Research shares are held by institutional investors. 2.1% of Healthcare Services Group shares are held by insiders. Comparatively, 1.1% of Acacia Research shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Summary
Healthcare Services Group beats Acacia Research on 12 of the 14 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 Acacia Research
Acacia is a publicly traded (Nasdaq: ACTG) company that is focused on acquiring and operating businesses across the industrial, energy and technology sectors where it believes it can leverage its expertise, significant capital base, and deep industry relationships to drive value. Acacia evaluates opportunities based on the attractiveness of the underlying cash flows, without regard to a specific investment horizon. Acacia operates its businesses based on three key principles of people, process, and performance and has built a management team with demonstrated expertise in research, transactions and execution, and operations and management.
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