Critical Survey: Jacobs Solutions (NYSE:J) & Exponent (NASDAQ:EXPO)

Jacobs Solutions (NYSE:J) and Exponent (NASDAQ:EXPO) are both industrials companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Valuation & Earnings

This table compares Jacobs Solutions and Exponent”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Jacobs Solutions	$12.03 billion	1.42	$289.34 million	$2.82	51.43
Exponent	$582.01 million	5.57	$106.01 million	$2.23	29.95

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

Profitability

This table compares Jacobs Solutions and Exponent’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Jacobs Solutions	2.40%	23.96%	7.02%
Exponent	17.67%	31.48%	15.53%

Analyst Ratings

This is a breakdown of current ratings for Jacobs Solutions and Exponent, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Jacobs Solutions	0	6	5	0	2.45
Exponent	0	2	2	0	2.50

Jacobs Solutions presently has a consensus price target of $152.22, suggesting a potential upside of 4.96%. Exponent has a consensus price target of $81.00, suggesting a potential upside of 21.28%. Given Exponent’s stronger consensus rating and higher probable upside, analysts clearly believe Exponent is more favorable than Jacobs Solutions.

Volatility and Risk

Jacobs Solutions has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500. Comparatively, Exponent has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500.

Institutional & Insider Ownership

85.7% of Jacobs Solutions shares are held by institutional investors. Comparatively, 92.4% of Exponent shares are held by institutional investors. 0.5% of Jacobs Solutions shares are held by insiders. Comparatively, 1.7% of Exponent shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Jacobs Solutions pays an annual dividend of $1.44 per share and has a dividend yield of 1.0%. Exponent pays an annual dividend of $1.24 per share and has a dividend yield of 1.9%. Jacobs Solutions pays out 51.1% 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. Jacobs Solutions has raised its dividend for 4 consecutive years and Exponent has raised its dividend for 12 consecutive years. Exponent is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Exponent beats Jacobs Solutions on 10 of the 16 factors compared between the two stocks.

About Jacobs Solutions

Jacobs Solutions Inc. provides consulting, technical, engineering, scientific, and project delivery services for the government and private sectors in the United States, Europe, Canada, India, Asia, Australia, New Zealand, the Middle East, and Africa. It operates through Critical Mission Solutions, People & Places Solutions, Divergent Solutions, and PA Consulting segments. The company offers cyber, data analytics, systems and software application integration and consulting, enterprise level and mission IT, design, nuclear, and enterprise level operations and maintenance services; software development, testing, mission integration, program management, research, development, test, evaluation services, training, and environmental remediation services; and other technical consulting solutions, as well as construction and construction management services. It also provides consulting services for consumer and manufacturing, defense and security, energy and utilities, financial services, government, health and life sciences, and transport industries. The company was founded in 1947 and is headquartered in Dallas, Texas.

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.