Critical Comparison: Distribution Solutions Group (NASDAQ:DSGR) vs. Yext (NYSE:YEXT)

Distribution Solutions Group (NASDAQ:DSGR) and Yext (NYSE:YEXT) are both small-cap business services companies, but which is the better business? We will compare the two businesses based on the strength of their risk, profitability, earnings, dividends, institutional ownership, analyst recommendations and valuation.

Earnings and Valuation

This table compares Distribution Solutions Group and Yext”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Distribution Solutions Group	$1.98 billion	0.64	$8.35 million	$0.12	228.42
Yext	$446.58 million	0.87	$37.87 million	$0.07	55.36

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

Insider and Institutional Ownership

91.6% of Distribution Solutions Group shares are owned by institutional investors. Comparatively, 71.0% of Yext shares are owned by institutional investors. 78.8% of Distribution Solutions Group shares are owned by company insiders. Comparatively, 7.8% of Yext shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Distribution Solutions Group has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500. Comparatively, Yext has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500.

Profitability

This table compares Distribution Solutions Group and Yext’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Distribution Solutions Group	0.27%	8.49%	3.13%
Yext	8.93%	43.47%	9.28%

Analyst Ratings

This is a breakdown of recent ratings for Distribution Solutions Group and Yext, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Distribution Solutions Group	1	1	2	0	2.25
Yext	1	3	2	0	2.17

Distribution Solutions Group currently has a consensus price target of $34.50, suggesting a potential upside of 25.87%. Yext has a consensus price target of $7.50, suggesting a potential upside of 93.55%. Given Yext’s higher possible upside, analysts plainly believe Yext is more favorable than Distribution Solutions Group.

Summary

Yext beats Distribution Solutions Group on 7 of the 13 factors compared between the two stocks.

About Distribution Solutions Group

Distribution Solutions Group, Inc., a specialty distribution company, engages in the provision of value-added distribution solutions in North America, Europe, Asia, South America, and the Middle East. The company provides its solutions to the maintenance, repair, and operations (MRO); original equipment manufacturer (OEM); and industrial technology markets. It operates through three segments: Lawson, Gexpro Services, and TestEquity. The Lawson segment distributes of specialty products and services to the industrial, commercial, institutional, and government MRO market. The TestEquity segment distributes test and measurement equipment and solutions, industrial and electronic production supplies, and vendor managed inventory programs, as well as converting, fabrication, and adhesive solutions under the TestEquity, Hisco, TEquipment, Techni-Tool, Jensen Tools, and Instrumex brands. The Gexpro Services segment provides supply chain management solutions that offer VMI, kitting, global logistics management, manufacturing localization and import expertise, value engineering, and quality assurance. The company was formerly known as Lawson Products, Inc. and has changed to Distribution Solutions Group, Inc. 2022 Distribution Solutions Group, Inc. was incorporated in 1952 and is headquartered in Fort Worth, Texas.

About Yext

Yext, Inc. organizes business facts to provide answers to consumer questions in North America and internationally. It operates Yext platform, a cloud-based platform that allows its customers to offer answers to consumer questions, to control the facts about their businesses and the content of their landing pages, and to manage their consumer reviews; and provides customers to update their information and content through its publisher network of maps, apps, search engines, intelligent GPS systems, digital assistants, vertical directories, and social networks, as well as professional services. The company’s platform also enables its customers to centralize, control and manage data fields, including store information comprising name, address, phone number, and holiday hours; professional information, such as headshot, specialties, and education; job information consists of title and description; FAQs and other information. It serves various industries, such as healthcare, hospitality, food services, retail, and financial services. Yext, Inc. was incorporated in 2006 and is headquartered in New York, New York.