Critical Review: Servicemaster Global (SERV) & Cardtronics (CATM)

Servicemaster Global (NYSE: SERV) and Cardtronics (NASDAQ:CATM) are both construction companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, dividends, risk, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Servicemaster Global and Cardtronics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Servicemaster Global 0 2 10 0 2.83
Cardtronics 1 2 2 0 2.20

Servicemaster Global presently has a consensus target price of $53.18, suggesting a potential downside of 1.13%. Cardtronics has a consensus target price of $27.25, suggesting a potential upside of 16.40%. Given Cardtronics’ higher possible upside, analysts clearly believe Cardtronics is more favorable than Servicemaster Global.

Earnings & Valuation

This table compares Servicemaster Global and Cardtronics’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Servicemaster Global $2.75 billion 2.65 $155.00 million $1.74 30.91
Cardtronics $1.27 billion 0.85 $87.99 million ($2.99) -7.83

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

Insider & Institutional Ownership

97.3% of Cardtronics shares are held by institutional investors. 1.2% of Servicemaster Global shares are held by insiders. Comparatively, 1.2% of Cardtronics shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Servicemaster Global and Cardtronics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Servicemaster Global 8.16% 40.22% 5.42%
Cardtronics -9.37% 29.32% 7.19%

Volatility & Risk

Servicemaster Global has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500. Comparatively, Cardtronics has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500.

Summary

Servicemaster Global beats Cardtronics on 10 of the 13 factors compared between the two stocks.

About Servicemaster Global

ServiceMaster Global Holdings, Inc. is a provider of essential residential and commercial services. The Company operates through three segments: Terminix, American Home Shield and the Franchise Services Group. Its portfolio of brands includes Terminix, American Home Shield, ServiceMaster Restore, ServiceMaster Clean, Merry Maids, Furniture Medic and AmeriSpec. The Terminix segment provides termite and pest control services in the United States. The American Home Shield segment provides home warranty plans that cover the repair or replacement of components of up to 21 household systems and appliances, including electrical, plumbing, central heating and air conditioning (HVAC) systems, dishwashers and ovens/cook tops. The Franchise Services Group segment consists of the ServiceMaster Restore (disaster restoration), ServiceMaster Clean (janitorial), Merry Maids (residential cleaning), Furniture Medic (cabinet and wood furniture repair) and AmeriSpec (home inspection) businesses.

About Cardtronics

Cardtronics plc, formerly Cardtronics, Inc., provides automated consumer financial services through its network of automated teller machines (ATMS) and multi-function financial services kiosks. The Company’s operations consists of its North America, Europe, and Corporate & Other segments. Its ATM operations in the United States, Canada, Mexico and Puerto Rico are included in its North America segment. Its ATM operations in the United Kingdom, Ireland, Germany, Poland, Spain and i-design are included in its Europe segment. Its transaction processing operations, which service its North American and European operations, along with external customers, and the Company’s corporate general and administrative functions comprise the Corporate & Other segment. As of December 31, 2016, it provided services to approximately 203,000 ATMs throughout the United States (including the United States territory of Puerto Rico), the United Kingdom, Ireland, Germany, Poland, Spain, Canada and Mexico.

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