Analyzing DLH (NASDAQ:DLHC) & Research Solutions (NASDAQ:RSSS)

Research Solutions (NASDAQ:RSSS) and DLH (NASDAQ:DLHC) are both small-cap industrials companies, but which is the better business? We will compare the two companies based on the strength of their earnings, institutional ownership, dividends, profitability, analyst recommendations, risk and valuation.

Volatility & Risk

Research Solutions has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500. Comparatively, DLH has a beta of 1.44, indicating that its share price is 44% more volatile than the S&P 500.

Insider & Institutional Ownership

33.6% of Research Solutions shares are owned by institutional investors. Comparatively, 67.2% of DLH shares are owned by institutional investors. 10.9% of Research Solutions shares are owned by company insiders. Comparatively, 12.8% of DLH shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Research Solutions	$48.31 million	1.48	$2.82 million	$0.09	23.78
DLH	$344.50 million	0.17	$1.36 million	($1.48)	-2.68

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Research Solutions and DLH, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Research Solutions	0	2	3	0	2.60
DLH	2	0	1	0	1.67

Research Solutions presently has a consensus price target of $3.83, indicating a potential upside of 79.13%. Given Research Solutions’ stronger consensus rating and higher possible upside, research analysts plainly believe Research Solutions is more favorable than DLH.

Profitability

This table compares Research Solutions and DLH’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Research Solutions	5.84%	15.55%	6.22%
DLH	-8.51%	-10.42%	-4.04%

Summary

Research Solutions beats DLH on 10 of the 14 factors compared between the two stocks.

About Research Solutions

Research Solutions, Inc., through its subsidiaries, provides research cloud-based software-as-a-service software platform and related services to corporate, academic, government and individual researchers in the United States, Europe, and internationally. It provides Discover platform that facilitates search discovery across virtually all scientific, technical, and medical (STM) articles available, including free basic search solutions and advanced search tools, which include the Resolute.ai and scite.ai products, a tools that allows for searching and identifying relevant research and find insights in other datasets adjacent to STM content, such as clinical trial, patent, life science and medtech regulatory information, competitor and technology landscape insights in addition to searching the customer’s internal datasets. The company also offers Article Galaxy, a solution that allows research organizations to load their entitlements, consisting of subscriptions, discount or token packages, and their existing library of articles. In addition, it provides Manage platform, a references solution that allows users to access the article inside the platform including setting up personal folders or team folders and allows researchers to markup and take notes on the articles in a supported browser on a desktop or tablet. Further, the company’s platform facilitates the sale of published STM content sold as individual articles. The company was formerly known as Derycz Scientific, Inc. and changed its name to Research Solutions, Inc. in March 2013. Research Solutions, Inc. was incorporated in 2006 and is based in Henderson, Nevada.

About DLH

DLH Holdings Corp. provides technology-enabled business process outsourcing, program management solutions, and public health research and analytics services in the United States. It offers digital transformation and cyber security solutions, including artificial intelligence and machine learning, cloud enablement, cybersecurity ecosystem, big data analytics, and modeling and simulation to the National Institutes of Health (NIH), the Defense Health Agency, Tele-medicine and Advanced Technology Research Center, and US Navy Naval Information Warfare Center (NIWC). The company also provides science research and development services and solutions, such as data analytics, testing and evaluation, clinical trials research services, and epidemiology studies to support multiple operating divisions, including NIH and the Center for Disease Control and Prevention, as well as the Military Health System. In addition, it offers system engineering and integration solutions in the areas of pharmaceutical delivery logistics, fire protection engineering, biomedical equipment, and technology engineering on behalf of the Department of Veterans Affairs, NIWC, Health and Human Services, and other federal customers. The company also provides business process management services under the trademarks, e-PRAT and SPOT-m, as well as the registered trademark, Infinibyte for cloud-based solutions. The company was formerly known as TeamStaff, Inc. and changed its name to DLH Holdings Corp. in June 2012. DLH Holdings Corp. was incorporated in 1969 and is headquartered in Atlanta, Georgia.