Reviewing SGS (OTCMKTS:SGSOY) and ABM Industries (NYSE:ABM)

SGS (OTCMKTS:SGSOY) and ABM Industries (NYSE:ABM) are both business services companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.

Dividends

SGS pays an annual dividend of $0.18 per share and has a dividend yield of 1.6%. ABM Industries pays an annual dividend of $1.06 per share and has a dividend yield of 2.5%. ABM Industries pays out 57.6% of its earnings in the form of a dividend. ABM Industries has increased its dividend for 59 consecutive years. ABM Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares SGS and ABM Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SGS	N/A	N/A	N/A
ABM Industries	1.34%	12.12%	4.18%

Valuation and Earnings

This table compares SGS and ABM Industries”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SGS	$7.72 billion	2.92	$659.96 million	N/A	N/A
ABM Industries	$8.63 billion	0.30	$81.40 million	$1.84	23.01

SGS has higher earnings, but lower revenue than ABM Industries.

Risk and Volatility

SGS has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500. Comparatively, ABM Industries has a beta of 0.76, meaning that its stock price is 24% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for SGS and ABM Industries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SGS	0	2	1	3	3.17
ABM Industries	0	3	2	0	2.40

ABM Industries has a consensus target price of $55.67, indicating a potential upside of 31.48%. Given ABM Industries’ higher probable upside, analysts clearly believe ABM Industries is more favorable than SGS.

Insider and Institutional Ownership

91.6% of ABM Industries shares are owned by institutional investors. 0.9% of ABM Industries shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

ABM Industries beats SGS on 10 of the 16 factors compared between the two stocks.

About SGS

SGS SA provides inspection, testing, and verification services in Europe, Africa, the Middle East, the Americas, and the Asia Pacific. It operates in five segments: Connectivity & Products, Health & Nutrition, Industries & Environment, Natural Resources, and Business Assurance. The company provides laboratory testing, product inspection and consulting, process assessment, technical and transactional assistance; and automotive, connectivity, softlines and accessories, and hardgoods, toys, and juvenile products, as well as government and trade facilitation services. In addition, it offers a range of testing, inspection and certification solutions for the crop science, food, health science, and cosmetics and hygiene industries; field services, technical assessment, and advisory services; and services related to industrial, public health and safety, environmental testing, and public mandates. Further, it provides assessment, auditing, and certification, supply chain assurance, training, consulting, and sustainability assurance services; agricultural commodities, geochemistry, laboratory testing petroleum and chemicals, metallurgy and consulting, mineral and metal commodities, and oil, gas, and chemical commodities; and sustainability solutions. The company serves the agriculture and food, chemical, construction, consumer and retail, energy, industrial manufacturing, life sciences, mining, oil and gas, public, and transportation sectors. SGS SA was founded in 1878 and is headquartered in Geneva, Switzerland.

About ABM Industries

ABM Industries Incorporated, through its subsidiaries, engages in the provision of integrated facility, infrastructure, and mobility solutions in the United States and internationally. It operates through Business & Industry, Manufacturing & Distribution, Education, Aviation, and Technical Solutions segments. The company offers janitorial, facilities engineering, and parking services for commercial real estate properties, including corporate offices for high tech clients, sports and entertainment venues, and traditional hospitals and non-acute healthcare facilities; provides vehicle maintenance and other services to rental car providers. It also offers integrated facility services, engineering, and other specialized services in various types of manufacturing, distribution, and data center facilities. In addition, the company delivers custodial and landscaping and grounds for public school districts, private schools, colleges, and universities. Further, it supports airlines and airports with services comprising passenger assistance, catering logistics, air cabin maintenance, and transportation services. Additionally, the company provides electric vehicle power design, installation, and maintenance, as well as microgrid systems installations. ABM Industries Incorporated was founded in 1909 and is headquartered in New York, New York.