Reviewing ServiceMaster Global (NYSE:SERV) and Atento (ATTO)

Atento (NYSE: ATTO) and ServiceMaster Global (NYSE:SERV) are both industrials companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Profitability

This table compares Atento and ServiceMaster Global’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atento 0.52% 12.63% 3.81%
ServiceMaster Global 8.16% 40.22% 5.42%

Dividends

Atento pays an annual dividend of $0.34 per share and has a dividend yield of 3.5%. ServiceMaster Global does not pay a dividend. Atento pays out 121.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

94.7% of Atento shares are held by institutional investors. 1.2% of ServiceMaster Global shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Atento has a beta of -0.07, indicating that its stock price is 107% less volatile than the S&P 500. Comparatively, ServiceMaster Global has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.

Earnings and Valuation

This table compares Atento and ServiceMaster Global’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Atento $1.76 billion 0.41 $60,000.00 $0.28 34.82
ServiceMaster Global $2.75 billion 2.46 $155.00 million $1.73 28.90

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Atento and ServiceMaster Global, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atento 0 1 2 0 2.67
ServiceMaster Global 2 2 7 0 2.45

Atento presently has a consensus price target of $14.67, suggesting a potential upside of 50.43%. ServiceMaster Global has a consensus price target of $48.73, suggesting a potential downside of 2.53%. Given Atento’s stronger consensus rating and higher possible upside, analysts clearly believe Atento is more favorable than ServiceMaster Global.

Summary

ServiceMaster Global beats Atento on 12 of the 16 factors compared between the two stocks.

About Atento

Atento S.A. is a provider of customer-relationship management and business-process outsourcing (CRM BPO) services and solutions in Latin America. The Company offers a portfolio of CRM BPO services, including customer care, sales, collections, back office and technical support. The Company operates through three segments: EMEA, Americas and Brazil. Its services and solutions are delivered across multiple channels including digital (short message service (SMS), e-mail, chats, social media and applications, among others) and voice, and are enabled by process design, technology and intelligence functions. The Company also has client relationships across a range of industries working in sectors, such as telecommunications, banking and financial services and multi-sector, which comprise the consumer goods, services, public administration, pay television, healthcare, transportation, technology and media industries.

About ServiceMaster Global

ServiceMaster Global Holdings, Inc. is a provider of essential residential and commercial services. The Company operates through three segments: Terminix, American Home Shield and the Franchise Services Group. Its portfolio of brands includes Terminix, American Home Shield, ServiceMaster Restore, ServiceMaster Clean, Merry Maids, Furniture Medic and AmeriSpec. The Terminix segment provides termite and pest control services in the United States. The American Home Shield segment provides home warranty plans that cover the repair or replacement of components of up to 21 household systems and appliances, including electrical, plumbing, central heating and air conditioning (HVAC) systems, dishwashers and ovens/cook tops. The Franchise Services Group segment consists of the ServiceMaster Restore (disaster restoration), ServiceMaster Clean (janitorial), Merry Maids (residential cleaning), Furniture Medic (cabinet and wood furniture repair) and AmeriSpec (home inspection) businesses.

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