WageWorks (NYSE: WAGE) and General Finance Corporation (NASDAQ:GFN) are both business services companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitabiliy, analyst recommendations, institutional ownership and risk.
Risk and Volatility
WageWorks has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500. Comparatively, General Finance Corporation has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500.
Valuation & Earnings
This table compares WageWorks and General Finance Corporation’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|WageWorks||$434.87 million||5.29||$81.87 million||$1.09||53.21|
|General Finance Corporation||$275.92 million||0.45||$55.88 million||($0.33)||-14.24|
WageWorks has higher revenue and earnings than General Finance Corporation. General Finance Corporation is trading at a lower price-to-earnings ratio than WageWorks, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings for WageWorks and General Finance Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|General Finance Corporation||0||0||2||0||3.00|
WageWorks presently has a consensus price target of $78.24, suggesting a potential upside of 34.90%. General Finance Corporation has a consensus price target of $7.60, suggesting a potential upside of 61.70%. Given General Finance Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe General Finance Corporation is more favorable than WageWorks.
This table compares WageWorks and General Finance Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|General Finance Corporation||-1.81%||-1.76%||-0.48%|
Insider & Institutional Ownership
96.3% of WageWorks shares are owned by institutional investors. Comparatively, 19.3% of General Finance Corporation shares are owned by institutional investors. 3.5% of WageWorks shares are owned by insiders. Comparatively, 25.8% of General Finance Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
WageWorks beats General Finance Corporation on 9 of the 13 factors compared between the two stocks.
WageWorks Company Profile
WageWorks, Inc. is engaged in administering Consumer-Directed Benefits (CDBs). The Company administers CBDs, including pre-tax spending accounts, such as Health Savings Accounts (HSAs), health and dependent care Flexible Spending Accounts (FSAs), and Health Reimbursement Arrangements (HRAs), as well as Commuter Benefit Services, including transit and parking programs, wellness programs, Consolidated Omnibus Budget Reconciliation Act (COBRA) and other employee benefits. Its CDB programs assist employees and their families in saving money by using pre-tax dollars to pay for certain of their healthcare, dependent care and commuter expenses. Employers financially benefit from its programs through reduced payroll taxes. It provides operational support services to its clients and its cross-functional teams, including customer support and claims processing. It administers HSAs for employers that allow employee participants to invest funds to be used for qualified healthcare expenses.
General Finance Corporation Company Profile
General Finance Corporation is a specialty rental services company. The Company offers a range of portable storage units, including its core 20-feet and 40-feet steel containers, office container, mobile office and modular space products and steel tanks. It has two geographic areas that include its four operating segments: the Asia-Pacific area, consisting of the leasing operations of Royal Wolf Holdings Limited and its Australian and New Zealand subsidiaries (Royal Wolf), and North America, consisting of the combined leasing operations of Pac-Van, Inc. and its Canadian subsidiary, PV Acquisition Corp. (Pac-Van) and Lone Star Tank Rental Inc. (Lone Star), and the manufacturing operations of GFN Manufacturing Corporation and its subsidiary, Southern Frac, LLC (Southern Frac). As of June 30, 2016, the Company provided its storage solutions to over 41,000 customers across a range of industries, including commercial, construction, retail, transportation, education and others.
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