Maximus (NYSE:MMS) versus HireQuest (NASDAQ:HQI) Critical Analysis

Maximus (NYSE:MMS) and HireQuest (NASDAQ:HQI) are both industrials companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Dividends

Maximus pays an annual dividend of $1.32 per share and has a dividend yield of 2.1%. HireQuest pays an annual dividend of $0.24 per share and has a dividend yield of 1.5%. Maximus pays out 19.5% of its earnings in the form of a dividend. HireQuest pays out 42.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Maximus has raised its dividend for 2 consecutive years. Maximus is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Maximus has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500. Comparatively, HireQuest has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Maximus and HireQuest, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Maximus	0	2	0	0	2.00
HireQuest	0	1	2	0	2.67

HireQuest has a consensus target price of $19.00, suggesting a potential upside of 15.08%. Given HireQuest’s stronger consensus rating and higher possible upside, analysts clearly believe HireQuest is more favorable than Maximus.

Insider and Institutional Ownership

97.2% of Maximus shares are held by institutional investors. Comparatively, 12.0% of HireQuest shares are held by institutional investors. 1.8% of Maximus shares are held by insiders. Comparatively, 42.9% of HireQuest shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Maximus and HireQuest”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Maximus	$5.43 billion	0.61	$319.03 million	$6.77	9.37
HireQuest	$30.64 million	7.49	$6.33 million	$0.57	28.96

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

Profitability

This table compares Maximus and HireQuest’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Maximus	7.07%	24.91%	10.08%
HireQuest	27.06%	16.35%	12.11%

Summary

HireQuest beats Maximus on 9 of the 17 factors compared between the two stocks.

About Maximus

Maximus, Inc. operates as a provider of government services in the United States and internationally. It operates through three segments: U.S. Federal Services, U.S. Services, and Outside the U.S. The U.S. Services segment offers program eligibility support and enrollment; centralized multilingual customer contact centers, multichannel, and digital self-service options for enrollment; application assistance and independent health plan choice counseling; beneficiary outreach, education, eligibility, enrollment, and redeterminations; and person-centered independent disability, long-term sick, and other health assessments. This segment also provides employment services, such as eligibility support, case management, job-readiness preparation, job search and employer outreach, job retention and career advancement, and educational and training services; technology solutions; system implementation project management services; and specialized consulting services. The U.S. Federal Services segment offers Business process services, eligibility and enrollment, outreach, and other services for federal health and human services programs; clinical services; and technology solutions, including application development and modernization services, enterprise business solutions, advanced analytics and emerging technologies, cybersecurity services, and infrastructure and engineering solutions. The Outside the U.S. segment offers BPS solutions for international governments, including health and disability assessments, program administration for employment services, wellbeing solutions, and other job seeker-related services. Maximus, Inc. was founded in 1975 and is headquartered in McLean, Virginia.

About HireQuest

HireQuest, Inc. provides temporary staffing services in the United States. It offers staffing services, including direct-dispatch, executive search, consultant, unskilled and semi-skilled industrial and construction personnel, clerical and administrative personnel, and permanent placement services, as well as commercial and non-CDL drivers, and skilled personnel in the medical and dental industries. The company provides its services under the HireQuest Direct, HireQuest, SNelling, DriverQuest, HireQuest Health, Northbound Executive Search, and MRI trade names. It serves construction, recycling, warehousing, logistics, auctioneering, manufacturing, hospitality, landscaping, and retail industries, as well as dental practices. HireQuest, Inc. was founded in 2002 and is headquartered in Goose Creek, South Carolina.