Contrasting BGSF (NYSE:BGSF) and First Advantage (NYSE:FA)

BGSF (NYSE:BGSF) and First Advantage (NYSE:FA) are both industrials companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, dividends, analyst recommendations, institutional ownership, valuation, risk and earnings.

Risk and Volatility

BGSF has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500. Comparatively, First Advantage has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500.

Institutional and Insider Ownership

37.2% of BGSF shares are owned by institutional investors. Comparatively, 94.9% of First Advantage shares are owned by institutional investors. 7.1% of BGSF shares are owned by company insiders. Comparatively, 4.4% of First Advantage shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares BGSF and First Advantage’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BGSF	-2.35%	-7.21%	-6.20%
First Advantage	0.65%	13.16%	7.33%

Analyst Recommendations

This is a summary of recent recommendations for BGSF and First Advantage, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BGSF	1	0	0	0	1.00
First Advantage	0	4	3	0	2.43

First Advantage has a consensus target price of $24.57, suggesting a potential upside of 4.43%. Given First Advantage’s stronger consensus rating and higher possible upside, analysts plainly believe First Advantage is more favorable than BGSF.

Earnings and Valuation

This table compares BGSF and First Advantage”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BGSF	$93.31 million	0.38	-$11.43 million	($0.19)	-17.74
First Advantage	$1.72 billion	2.35	$37.29 million	$0.14	168.07

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

Summary

First Advantage beats BGSF on 13 of the 14 factors compared between the two stocks.

About BGSF

BGSF, Inc., together with its subsidiaries, provides consulting, managed services, and professional workforce solutions in the United States. It operates in two segments, Property Management and Professional. The Property Management segment offers office and maintenance field talent to various apartment communities and commercial buildings. The Professional segment provides skilled IT professionals in SAP, Workday, Peoplesoft, Hyperion, Oracle, One Stream, cyber, project management, management services, and other IT workforce solutions. This segment also offers finance, accounting, legal, human resource, and related support personnel. It serves its products to fortune 500 companies, and medium and small companies, as well as consulting companies. The company was formerly known as BG Staffing, Inc. and changed its name to BGSF, Inc. in February 2021. BGSF, Inc. was incorporated in 2007 and is based in Plano, Texas.

About First Advantage

First Advantage Corporation provides employment background screening, identity, and verification solutions worldwide. It offers pre-onboarding products and solutions, such as criminal background checks, drug/health screening, extended workforce screening, FBI channeling, identity checks and biometric fraud mitigation tools, education/work history verification, driver records and compliance, healthcare credentials, executive screening, and other screening products. The company also provides post-onboarding solutions, including criminal records monitoring, healthcare sanctions, motor vehicle records, social media screening, and global sanctions and licenses; and other products comprising fleet/vehicle compliance, hiring tax credits and incentives, resident/tenant screening, and investigative research. Its products and solutions are used by personnel in recruiting, human resources, risk, compliance, vendor management, safety, and/or security in global enterprises, mid-sized, and small companies. The company was formerly known as Fastball Intermediate, Inc. and changed its name to First Advantage Corporation in March 2021. First Advantage Corporation was founded in 2002 and is based in Atlanta, Georgia.