Alight (NYSE:ALIT) & DLH (NASDAQ:DLHC) Critical Review

DLH (NASDAQ:DLHC) and Alight (NYSE:ALIT) are both small-cap industrials companies, but which is the better business? We will contrast the two companies based on the strength of their risk, institutional ownership, earnings, dividends, valuation, analyst recommendations and profitability.

Volatility & Risk

DLH has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500. Comparatively, Alight has a beta of 1.56, meaning that its share price is 56% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for DLH and Alight, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DLH	2	0	1	0	1.67
Alight	2	3	3	0	2.12

Alight has a consensus target price of $52.33, suggesting a potential upside of 339.89%. Given Alight’s stronger consensus rating and higher probable upside, analysts plainly believe Alight is more favorable than DLH.

Valuation & Earnings

This table compares DLH and Alight”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DLH	$344.50 million	0.17	$1.36 million	($1.48)	-2.66
Alight	$2.23 billion	0.14	-$3.10 billion	($77.18)	-0.15

DLH has higher earnings, but lower revenue than Alight. DLH is trading at a lower price-to-earnings ratio than Alight, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares DLH and Alight’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DLH	-8.51%	-10.42%	-4.04%
Alight	-90.90%	16.05%	4.38%

Institutional and Insider Ownership

67.2% of DLH shares are owned by institutional investors. Comparatively, 96.7% of Alight shares are owned by institutional investors. 12.8% of DLH shares are owned by company insiders. Comparatively, 2.1% of Alight shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Alight beats DLH on 9 of the 14 factors compared between the two stocks.

About DLH

DLH Holdings Corp. provides technology-enabled business process outsourcing, program management solutions, and public health research and analytics services in the United States. It offers digital transformation and cyber security solutions, including artificial intelligence and machine learning, cloud enablement, cybersecurity ecosystem, big data analytics, and modeling and simulation to the National Institutes of Health (NIH), the Defense Health Agency, Tele-medicine and Advanced Technology Research Center, and US Navy Naval Information Warfare Center (NIWC). The company also provides science research and development services and solutions, such as data analytics, testing and evaluation, clinical trials research services, and epidemiology studies to support multiple operating divisions, including NIH and the Center for Disease Control and Prevention, as well as the Military Health System. In addition, it offers system engineering and integration solutions in the areas of pharmaceutical delivery logistics, fire protection engineering, biomedical equipment, and technology engineering on behalf of the Department of Veterans Affairs, NIWC, Health and Human Services, and other federal customers. The company also provides business process management services under the trademarks, e-PRAT and SPOT-m, as well as the registered trademark, Infinibyte for cloud-based solutions. The company was formerly known as TeamStaff, Inc. and changed its name to DLH Holdings Corp. in June 2012. DLH Holdings Corp. was incorporated in 1969 and is headquartered in Atlanta, Georgia.

About Alight

Alight, Inc. provides cloud-based integrated digital human capital and business solutions worldwide. The company operates through two segments, Employer Solutions and Professional Services. The Employer Solutions segment offers employee wellbeing, integrated benefits administration, healthcare navigation, financial wellbeing, leave of absence management, retiree healthcare and payroll; and operates AI-led capabilities software. The Professional Services segment offers consulting offerings, such as cloud advisory, deployment, and optimization services for cloud platforms. The company provides Alight Worklife, an intuitive, cloud-based employee engagement platform. Its solutions enable employees to enrich their health, wealth, and wellbeing that helps organizations achieve a high-performance culture. Alight, Inc. was founded in 2020 and is based in Lincolnshire, Illinois.