Financial Contrast: Maximus (NYSE:MMS) versus TransUnion (NYSE:TRU)

TransUnion (NYSE:TRU) and Maximus (NYSE:MMS) are both industrials companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, institutional ownership, dividends, valuation, analyst recommendations, profitability and risk.

Profitability

This table compares TransUnion and Maximus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TransUnion	15.08%	16.29%	6.67%
Maximus	7.07%	24.91%	10.08%

Volatility and Risk

TransUnion has a beta of 1.54, indicating that its share price is 54% more volatile than the S&P 500. Comparatively, Maximus has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500.

Dividends

TransUnion pays an annual dividend of $0.50 per share and has a dividend yield of 0.6%. Maximus pays an annual dividend of $1.32 per share and has a dividend yield of 2.3%. TransUnion pays out 13.2% of its earnings in the form of a dividend. Maximus pays out 19.5% 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. TransUnion has increased its dividend for 1 consecutive years and Maximus has increased its dividend for 2 consecutive years. Maximus is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares TransUnion and Maximus”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TransUnion	$4.58 billion	3.25	$455.40 million	$3.79	20.51
Maximus	$5.43 billion	0.55	$319.03 million	$6.77	8.42

TransUnion has higher earnings, but lower revenue than Maximus. Maximus is trading at a lower price-to-earnings ratio than TransUnion, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

97.2% of Maximus shares are held by institutional investors. 0.4% of TransUnion shares are held by insiders. Comparatively, 1.8% of Maximus shares are held 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 Recommendations

This is a breakdown of recent ratings and recommmendations for TransUnion and Maximus, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TransUnion	0	6	10	0	2.62
Maximus	1	1	0	0	1.50

TransUnion presently has a consensus target price of $94.38, suggesting a potential upside of 21.40%. Given TransUnion’s stronger consensus rating and higher possible upside, equities analysts clearly believe TransUnion is more favorable than Maximus.

Summary

TransUnion beats Maximus on 9 of the 17 factors compared between the two stocks.

About TransUnion

TransUnion operates as a global consumer credit reporting agency that provides risk and information solutions. The company operates through U.S. Markets, International, and Consumer Interactive segments. The U.S. Markets segment provides consumer reports, actionable insights, and analytic services to businesses, which uses its services to acquire new customers; assess consumer ability to pay for services; identify cross-selling opportunities; measure and manage debt portfolio risk; collect debt; verify consumer identities; and mitigate fraud risk. This segment serves various industry vertical markets, including financial services, technology, commerce and communications, insurance, media, services and collections, tenant and employment, and public sectors. The International segment offers credit reports, analytics, technology solutions, and other value-added risk management services; consumer services, which help consumers to manage their personal finances; consumer credit reporting, insurance and auto information solutions, and commercial credit information services. It serves customers in financial services, retail credit, insurance, automotive, collections, public sector, and communications industries through direct and indirect channels. The company was formerly known as TransUnion Holding Company, Inc. and changed its name to TransUnion in March 2015. TransUnion was founded in 1968 and is headquartered in Chicago, Illinois.

About Maximus

Maximus, Inc. operates as a provider of government services in the United States and internationally. It operates through three segments: U.S. Federal Services, U.S. Services, and Outside the U.S. The U.S. Services segment offers program eligibility support and enrollment; centralized multilingual customer contact centers, multichannel, and digital self-service options for enrollment; application assistance and independent health plan choice counseling; beneficiary outreach, education, eligibility, enrollment, and redeterminations; and person-centered independent disability, long-term sick, and other health assessments. This segment also provides employment services, such as eligibility support, case management, job-readiness preparation, job search and employer outreach, job retention and career advancement, and educational and training services; technology solutions; system implementation project management services; and specialized consulting services. The U.S. Federal Services segment offers Business process services, eligibility and enrollment, outreach, and other services for federal health and human services programs; clinical services; and technology solutions, including application development and modernization services, enterprise business solutions, advanced analytics and emerging technologies, cybersecurity services, and infrastructure and engineering solutions. The Outside the U.S. segment offers BPS solutions for international governments, including health and disability assessments, program administration for employment services, wellbeing solutions, and other job seeker-related services. Maximus, Inc. was founded in 1975 and is headquartered in McLean, Virginia.