Alliance Data Systems Corporation (NYSE: ADS) and Exponent (NASDAQ:EXPO) are both business services companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, risk and valuation.
Valuation & Earnings
This table compares Alliance Data Systems Corporation and Exponent’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Alliance Data Systems Corporation||$7.41 billion||1.62||$1.47 billion||$8.78||24.60|
|Exponent||$311.50 million||5.85||$71.89 million||$1.93||36.63|
Alliance Data Systems Corporation has higher revenue and earnings than Exponent. Alliance Data Systems Corporation is trading at a lower price-to-earnings ratio than Exponent, indicating that it is currently the more affordable of the two stocks.
Alliance Data Systems Corporation pays an annual dividend of $2.08 per share and has a dividend yield of 1.0%. Exponent pays an annual dividend of $0.84 per share and has a dividend yield of 1.2%. Alliance Data Systems Corporation pays out 23.7% of its earnings in the form of a dividend. Exponent pays out 43.5% 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.
Risk and Volatility
Alliance Data Systems Corporation has a beta of 1.76, meaning that its stock price is 76% more volatile than the S&P 500. Comparatively, Exponent has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500.
Insider and Institutional Ownership
96.1% of Alliance Data Systems Corporation shares are owned by institutional investors. Comparatively, 88.3% of Exponent shares are owned by institutional investors. 2.6% of Alliance Data Systems Corporation shares are owned by insiders. Comparatively, 2.8% of Exponent shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This table compares Alliance Data Systems Corporation and Exponent’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Alliance Data Systems Corporation||6.77%||59.67%||3.74%|
This is a breakdown of current ratings and recommmendations for Alliance Data Systems Corporation and Exponent, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Alliance Data Systems Corporation||3||7||10||0||2.35|
Alliance Data Systems Corporation presently has a consensus target price of $253.44, indicating a potential upside of 17.33%. Exponent has a consensus target price of $75.00, indicating a potential upside of 6.08%. Given Alliance Data Systems Corporation’s higher possible upside, analysts plainly believe Alliance Data Systems Corporation is more favorable than Exponent.
Alliance Data Systems Corporation beats Exponent on 9 of the 16 factors compared between the two stocks.
Alliance Data Systems Corporation Company Profile
Alliance Data Systems Corporation is a provider of data-driven marketing and loyalty solutions serving consumer-based businesses in a range of industries. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. The Company operates through three segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company’s Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty); Epsilon, which provides end-to-end, integrated direct marketing solutions, and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company’s private label and co-brand retail credit card programs.
Exponent Company Profile
Exponent, Inc. (Exponent), along with its subsidiaries, is a science and engineering consulting company. Exponent provides engineering and scientific consulting services to clients around the world. Its service offerings are provided on a project-by-project basis. It operates in two segments: Engineering and Other Scientific, and Environmental and Health. Its Engineering and Other Scientific segment includes biomechanics, biomedical engineering, buildings and structures, civil engineering, construction consulting, materials and corrosion engineering, mechanical engineering, polymer science and materials chemistry, statistical and data sciences, thermal sciences and vehicle analysis services. Its Environmental and Health segment includes chemical regulation and food safety; ecological and biological sciences; environmental and earth sciences, and health sciences. Exponent serves clients in automotive, government, health, insurance, manufacturing and technology, among others.
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