Adecco (OTCMKTS:AHEXY – Get Free Report) and Exponent (NASDAQ:EXPO – Get Free Report) are both mid-cap industrials companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, dividends, institutional ownership and risk.
Dividends
Adecco pays an annual dividend of $0.33 per share and has a dividend yield of 2.4%. Exponent pays an annual dividend of $1.24 per share and has a dividend yield of 1.7%. Adecco pays out 32.7% of its earnings in the form of a dividend. Exponent pays out 55.6% 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. Exponent has increased its dividend for 12 consecutive years. Adecco is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional and Insider Ownership
92.4% of Exponent shares are owned by institutional investors. 1.7% of Exponent shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Analyst Ratings
This is a breakdown of current recommendations and price targets for Adecco and Exponent, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Adecco | 2 | 4 | 1 | 1 | 2.12 |
| Exponent | 0 | 2 | 2 | 0 | 2.50 |
Exponent has a consensus price target of $81.00, suggesting a potential upside of 10.73%. Given Exponent’s stronger consensus rating and higher probable upside, analysts plainly believe Exponent is more favorable than Adecco.
Risk and Volatility
Adecco has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500. Comparatively, Exponent has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500.
Valuation and Earnings
This table compares Adecco and Exponent”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Adecco | $26.11 billion | 0.19 | $333.76 million | $1.01 | 13.79 |
| Exponent | $632.46 million | 5.50 | $106.01 million | $2.23 | 32.80 |
Adecco has higher revenue and earnings than Exponent. Adecco is trading at a lower price-to-earnings ratio than Exponent, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Adecco and Exponent’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Adecco | 1.25% | 12.67% | 3.62% |
| Exponent | 17.67% | 31.48% | 15.53% |
Summary
Exponent beats Adecco on 12 of the 18 factors compared between the two stocks.
About Adecco
Adecco Group AG, together with its subsidiaries, provides human resource services to businesses and organizations in Europe, North America, Asia Pacific, South America, and North Africa. It offers flexible placement, permanent placement, outsourcing, training, upskilling and reskilling, career transition and workforce transformation, consulting, talent academy, digital staffing solutions under the Adecco, Akkodis, General Assembly, Badenoch + Clark, Lee Hecht Harrison, pontoon, Spring Professional, Adia, Modis, and YOSS brand names. The company also operates Hired, a talent recruitment platform. The company was formerly known as Adecco S.A. Adecco Group AG was founded in 1957 and is based in Zurich, Switzerland.
About Exponent
Exponent, Inc., together with its subsidiaries, operates as a science and engineering consulting company in the United States and internationally. The company operates in two segments, Engineering and Other Scientific, and Environmental and Health. The Engineering and Other Scientific segment provides services in the areas of biomechanics, biomedical engineering and sciences, buildings and structures, civil engineering, construction consulting, data sciences, electrical engineering and computer science, human factors, materials and corrosion engineering, mechanical engineering, polymer science and materials chemistry, thermal sciences, and vehicle engineering. The Environmental and Health segment offers services in the areas of chemical regulation and food safety, ecological and biological sciences, environmental and earth sciences, and health sciences. The company offers approximately 90 technical disciplines to solve pressing and complicated challenges facing stakeholders. It serves clients in chemical, construction, consumer products, energy, food, beverage and nutrition, government, life sciences, insurance, manufacturing, technology, industrial equipment, transportation, and other sectors of the economy. The company was formerly known as The Failure Group, Inc. and changed its name to Exponent, Inc. in 1998. The company was founded in 1967 and is headquartered in Menlo Park, California.
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