Analyzing Healthcare Services Group (NASDAQ:HCSG) and SPAR Group (NASDAQ:SGRP)

Healthcare Services Group (NASDAQ:HCSG) and SPAR Group (NASDAQ:SGRP) are both small-cap business services companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, valuation, profitability, institutional ownership and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Healthcare Services Group	2.20%	12.23%	7.52%
SPAR Group	-9.52%	-34.89%	-12.15%

Earnings & Valuation

This table compares Healthcare Services Group and SPAR Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Healthcare Services Group	$1.81 billion	0.70	$39.47 million	$0.54	33.46
SPAR Group	$163.63 million	0.13	-$3.15 million	($0.07)	-12.89

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

Analyst Recommendations

This is a summary of current ratings for Healthcare Services Group and SPAR Group, 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
SPAR Group	1	0	0	0	1.00

Healthcare Services Group currently has a consensus target price of $19.40, indicating a potential upside of 7.36%. Given Healthcare Services Group’s stronger consensus rating and higher possible upside, equities analysts clearly believe Healthcare Services Group is more favorable than SPAR Group.

Volatility & Risk

Healthcare Services Group has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, SPAR Group has a beta of 0.06, indicating that its share price is 94% less volatile than the S&P 500.

Insider & Institutional Ownership

98.0% of Healthcare Services Group shares are owned by institutional investors. Comparatively, 9.6% of SPAR Group shares are owned by institutional investors. 2.6% of Healthcare Services Group shares are owned by company insiders. Comparatively, 50.9% of SPAR Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Healthcare Services Group beats SPAR Group on 13 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 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.