Financial Analysis: Parsons (NYSE:PSN) vs. Insperity (NYSE:NSP)

Parsons (NYSE:PSN) and Insperity (NYSE:NSP) are both industrials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Parsons	$6.36 billion	0.75	$241.14 million	$1.45	30.95
Insperity	$6.87 billion	0.28	-$7.00 million	($0.43)	-116.60

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

Insider & Institutional Ownership

98.0% of Parsons shares are owned by institutional investors. Comparatively, 93.4% of Insperity shares are owned by institutional investors. 1.3% of Parsons shares are owned by company insiders. Comparatively, 5.8% of Insperity shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Parsons and Insperity, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Parsons	2	3	11	0	2.56
Insperity	2	2	1	0	1.80

Parsons presently has a consensus target price of $64.08, indicating a potential upside of 42.79%. Insperity has a consensus target price of $53.33, indicating a potential upside of 6.38%. Given Parsons’ stronger consensus rating and higher possible upside, research analysts plainly believe Parsons is more favorable than Insperity.

Risk & Volatility

Parsons has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, Insperity has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500.

Profitability

This table compares Parsons and Insperity’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Parsons	2.50%	8.10%	3.75%
Insperity	-0.23%	-19.99%	-0.60%

Summary

Parsons beats Insperity on 12 of the 14 factors compared between the two stocks.

About Parsons

Parsons Corporation provides integrated solutions and services in the defense, intelligence, and critical infrastructure markets in North America, the Middle East, and internationally. The company operates through Federal Solutions and Critical Infrastructure segments. The Federal Solutions segment provides critical technologies, such as cybersecurity; missile defense; intelligence; space launch and ground systems; space and weapon system resiliency; geospatial intelligence; signals intelligence; environmental remediation; border security, critical infrastructure protection; counter unmanned air systems; biometrics and bio surveillance solutions to U.S. Department of Defense, including military services; Missile Defense Agency, the Department of Energy; the Department of State; the Department of Homeland Security, and the Federal Aviation Administration. The Critical Infrastructure segment provides management, design, and engineering services, as well as offers leveraging sensor solutions. This segment develops digital solutions for next generation aviation, rail and transit, bridges, roads, and highways; and provides water and wastewater treatment systems; AI/ML, and digital twin and cyber systems integration services; planning, engineering, and management services for infrastructure, including bridges and tunnels, roads and highways, water and wastewater, and dams and reservoirs. Parsons Corporation was founded in 1944 and is headquartered in Chantilly, Virginia.

About Insperity

Insperity, Inc. engages in the provision of human resources (HR) and business solutions to improve business performance for small and medium-sized businesses primarily in the United States. It offers its HR services through its workforce optimization and workforce synchronization solutions that include a range of human resources functions, such as payroll and employment administration, employee benefits, workers' compensation, government compliance, performance management, and training and development services. The company also provides Insperity Premier, a cloud-based human capital management platform that offers professional employer organization HR outsourcing solutions to its clients; people management services; and employer liability management services, as well as solutions for middle market. In addition, it offers MarketPlace, an e-commerce portal that offers a range of products and services; and Workforce Acceleration, a human capital management and payroll services solution; integrated payroll; benefits administration; HR administration and employee onboarding; time and attendance; performance management; reporting and analytics; recruiting; employment screening; retirement; and insurance services. The company was formerly known as Administaff, Inc. and changed its name to Insperity, Inc. in March 2011. Insperity, Inc. was founded in 1986 and is headquartered in Kingwood, Texas.