UL Solutions (NYSE:ULS) versus HireQuest (NASDAQ:HQI) Financial Analysis

UL Solutions (NYSE:ULS) and HireQuest (NASDAQ:HQI) are both industrials companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, institutional ownership, profitability, analyst recommendations and dividends.

Analyst Ratings

This is a summary of current ratings for UL Solutions and HireQuest, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UL Solutions	0	5	7	0	2.58
HireQuest	0	1	2	0	2.67

UL Solutions presently has a consensus target price of $95.78, indicating a potential upside of 36.83%. HireQuest has a consensus target price of $19.00, indicating a potential upside of 10.47%. Given UL Solutions’ higher possible upside, equities research analysts clearly believe UL Solutions is more favorable than HireQuest.

Valuation & Earnings

This table compares UL Solutions and HireQuest”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UL Solutions	$3.05 billion	4.63	$325.00 million	$2.47	28.34
HireQuest	$30.64 million	7.80	$6.33 million	$0.57	30.18

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

Dividends

UL Solutions pays an annual dividend of $0.58 per share and has a dividend yield of 0.8%. HireQuest pays an annual dividend of $0.24 per share and has a dividend yield of 1.4%. UL Solutions pays out 23.5% of its earnings in the form of a dividend. HireQuest pays out 42.1% 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

UL Solutions has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, HireQuest has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500.

Profitability

This table compares UL Solutions and HireQuest’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
UL Solutions	16.02%	28.81%	13.25%
HireQuest	27.06%	16.35%	12.11%

Insider and Institutional Ownership

12.0% of HireQuest shares are owned by institutional investors. 1.2% of UL Solutions shares are owned by insiders. Comparatively, 42.9% of HireQuest shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

About UL Solutions

UL Solutions Inc. provides safety science services worldwide. It operates through three segments: Industrial, Consumer, and Software and Advisory. The Industrial segment provides testing, inspection, and certification services across various end markets, including energy, industrial automation, engineered materials, and built environment, as well as stakeholders, such as manufacturers, building owners, end users, and regulators. The Consumer segment offers safety certification testing, ongoing certification, global market access, testing for connectivity, performance and quality, and critical systems advisory and training services, as well as product market acceptance and risk mitigation services for customers in the consumer products end markets comprising consumer electronics, medical devices, information technologies, appliances, HVAC, lighting, and retail, as well as consumer applications, such as new mobility, smart products, and 5G. The Software and Advisory segment provide software and technical advisory services that enable customers to manage regulatory requirements, deliver supply chain transparency, and operationalize sustainability for regulated industries, including life sciences, supply chain regulations, transparency needs, and new ESG and sustainability requirements. It offers ULTRUS software brand to help customers improve speed to market, sustainability and safety. UL Solutions Inc. was formerly known as UL Inc. and changed its name to UL Solutions Inc. in June 2022. The company was founded in 1894 and is headquartered in Northbrook, Illinois with additional offices in North America, Asia Pacific, Africa, Europe, Latin America, and Middle East. UL Solutions Inc. operates as a subsidiary of ULSE Inc.

About HireQuest

HireQuest, Inc. provides temporary staffing services in the United States. It offers staffing services, including direct-dispatch, executive search, consultant, unskilled and semi-skilled industrial and construction personnel, clerical and administrative personnel, and permanent placement services, as well as commercial and non-CDL drivers, and skilled personnel in the medical and dental industries. The company provides its services under the HireQuest Direct, HireQuest, SNelling, DriverQuest, HireQuest Health, Northbound Executive Search, and MRI trade names. It serves construction, recycling, warehousing, logistics, auctioneering, manufacturing, hospitality, landscaping, and retail industries, as well as dental practices. HireQuest, Inc. was founded in 2002 and is headquartered in Goose Creek, South Carolina.