Contrasting SPAR Group (NASDAQ:SGRP) and Aramark (NYSE:ARMK)

Aramark (NYSE:ARMK) and SPAR Group (NASDAQ:SGRP) are both business services companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.

Volatility and Risk

Aramark has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500. Comparatively, SPAR Group has a beta of 0.09, indicating that its stock price is 91% less volatile than the S&P 500.

Institutional and Insider Ownership

9.6% of SPAR Group shares are owned by institutional investors. 2.8% of Aramark shares are owned by insiders. Comparatively, 50.9% of SPAR Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Aramark and SPAR Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aramark	1.76%	16.39%	3.83%
SPAR Group	-9.52%	-34.89%	-12.15%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Aramark and SPAR Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aramark	0	2	4	1	2.86
SPAR Group	1	0	0	0	1.00

Aramark currently has a consensus price target of $45.83, suggesting a potential upside of 24.28%. Given Aramark’s stronger consensus rating and higher probable upside, research analysts clearly believe Aramark is more favorable than SPAR Group.

Earnings and Valuation

This table compares Aramark and SPAR Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aramark	$18.51 billion	0.52	$326.39 million	$1.22	30.23
SPAR Group	$163.63 million	0.12	-$3.15 million	($0.07)	-11.30

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

Summary

Aramark beats SPAR Group on 13 of the 15 factors compared between the two stocks.

About Aramark

Aramark provides food and facilities services to education, healthcare, business and industry, sports, leisure, and corrections clients in the United States and internationally. It operates through two segments, Food and Support Services United States, and Food and Support Services International. The company offers food-related managed services, including dining, catering, food service management, and convenience-oriented retail services; non-clinical food and food-related support services, such as patient food and nutrition, retail food, environmental services, and procurement services; and plant operations and maintenance, custodial/housekeeping, energy management, grounds keeping, and capital project management services. It also provides on-site restaurants, catering, convenience stores, and executive dining services; beverage and vending services; and facility management services comprising landscaping, transportation, capital program management, payment services, and other facility consulting services relating to building operations. In addition, the company offers concessions, banquet, and catering services; retail services and merchandise sale, recreational, and lodging services; and facility management services at sports, entertainment, and recreational facilities. Further, it offers correctional food; and operates commissaries, laundry facilities, and property rooms. It primarily serves business and industry, sports, leisure and corrections, education, healthcare, public institutions, manufacturing, transportation, service, and other industries. The company was formerly known as ARAMARK Holdings Corporation. Aramark was founded in 1959 and is based in Philadelphia, Pennsylvania.

About SPAR Group

SPAR Group, Inc., together with its subsidiaries, provides merchandising and brand marketing services in the Americas, the Asia-Pacific, Europe, Middle East, and Africa. The company offers merchandising and marketing services, such as resets and cut-ins; price and inventory audits; stock replenishment and rotation services; out of stock management; promotional event setup; and display management, as well as category management and set up services comprising category and product resets; planogram maintenance; display and shelf services; and point of purchase installation and management. It also provides remodel and retail transformation consisting of store remodels, store department resets, fixture and banner installations, pop-up store services, and store closings; and assembly and installation services, including assembly of merchandise in stores, in-store services, office setup/down-sizing services, and national in-home furniture assembly services. In addition, the company offers business analytics and insights services, such as product dashboards, stock out reporting, visit reporting, real-time service insights, and share of shelf analytics; and fulfillment and distribution services comprising distribution center staffing, point of purchase fulfillment services, kiosk prep, returns processing, picking and packing services, and inventory services. The company serves mass merchandisers; HBAs; pharmacies; and grocery, discount, dollar, convenience, cash and carry, home improvement, consumer electronics, automotive aftermarket, office supply, personal technology, beverage, household products, consumables, financial products, and independent stores. SPAR Group, Inc. was founded in 1967 and is headquartered in Auburn Hills, Michigan.