ADT (NYSE:ADT – Get Free Report) and Service Corporation International (NYSE:SCI – Get Free Report) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, risk, profitability, institutional ownership, earnings and dividends.
Earnings & Valuation
This table compares ADT and Service Corporation International”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| ADT | $5.13 billion | 0.91 | $595.95 million | $0.71 | 8.97 |
| Service Corporation International | $4.31 billion | 2.45 | $542.61 million | $3.83 | 20.20 |
Profitability
This table compares ADT and Service Corporation International’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| ADT | 11.85% | 18.99% | 4.40% |
| Service Corporation International | 12.30% | 34.38% | 2.91% |
Institutional & Insider Ownership
87.2% of ADT shares are held by institutional investors. Comparatively, 85.5% of Service Corporation International shares are held by institutional investors. 3.0% of ADT shares are held by company insiders. Comparatively, 3.4% of Service Corporation International shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Risk and Volatility
ADT has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500. Comparatively, Service Corporation International has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500.
Dividends
ADT pays an annual dividend of $0.22 per share and has a dividend yield of 3.5%. Service Corporation International pays an annual dividend of $1.44 per share and has a dividend yield of 1.9%. ADT pays out 31.0% of its earnings in the form of a dividend. Service Corporation International pays out 37.6% 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. ADT has raised its dividend for 1 consecutive years and Service Corporation International has raised its dividend for 15 consecutive years. ADT is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Recommendations
This is a summary of recent recommendations for ADT and Service Corporation International, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| ADT | 1 | 4 | 2 | 0 | 2.14 |
| Service Corporation International | 0 | 0 | 4 | 0 | 3.00 |
ADT currently has a consensus price target of $8.23, indicating a potential upside of 29.26%. Service Corporation International has a consensus price target of $100.67, indicating a potential upside of 30.12%. Given Service Corporation International’s stronger consensus rating and higher probable upside, analysts clearly believe Service Corporation International is more favorable than ADT.
Summary
Service Corporation International beats ADT on 10 of the 17 factors compared between the two stocks.
About ADT
ADT Inc. provides security, interactive, and smart home solutions to residential and small business customers in the United States. It operates through two segments, Consumer and Small Business, and Solar. The company provides burglar and life safety alarms, smart security cameras, smart home automation systems, and video surveillance systems. It primarily offers security designed to detect intrusion, control access, sense movement, smoke, fire, carbon monoxide, flooding, temperature, and other environmental conditions and hazards; and address personal medical emergencies, such as injuries or unanticipated falls. The company also provides automation and smart home solutions that allow customers to use their smart phones, smart phone application, or touchscreen panels in their homes to arm and disarm their security systems; record and view real-time video; and creates customized and automated schedules for connected devices; programs systems to react to defined events; integrates system with third-party connected devices, such as cameras, lights, thermostats, appliances, and garage doors, as well as offers monitoring and maintenance services. In addition, the company offers energy storage solutions, energy efficiency upgrades, and roofing services. It offers its products under the ADT, ADT Pulse, ADT+, and ADT Commercial brand names. The company was formerly known as Prime Security Services Parent, Inc. and changed its name to ADT Inc. in September 2017. ADT Inc. was founded in 1874 and is headquartered in Boca Raton, Florida.
About Service Corporation International
Service Corp. International engages in the provision of funeral goods and services. It operates through the Funeral and Cemetery segments. The Funeral segment offers services related to cremations, including the use of home facilities and motor vehicles, arranging and directing services, removal, preparation, embalming, memorialization, and catering. The Cemetery segment provides property interment rights, including lawn crypts, mausoleum spaces, niches, and interment options. The company was founded by Robert L. Waltrip in July 1962 and is headquartered in Houston, TX.
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