Itex (OTCMKTS:ITEX) and Healthcare Services Group (NASDAQ:HCSG) Financial Analysis

Itex (OTCMKTS:ITEX) and Healthcare Services Group (NASDAQ:HCSG) are both small-cap business services companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, risk, dividends, earnings and valuation.

Institutional and Insider Ownership

98.0% of Healthcare Services Group shares are owned by institutional investors. 32.0% of Itex shares are owned by company insiders. Comparatively, 2.9% of Healthcare Services Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Itex and Healthcare Services Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Itex	$5.44 million	0.91	$500,000.00	N/A	N/A
Healthcare Services Group	$1.84 billion	0.90	$59.06 million	$0.96	25.14

Healthcare Services Group has higher revenue and earnings than Itex.

Profitability

This table compares Itex and Healthcare Services Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Itex	N/A	N/A	N/A
Healthcare Services Group	3.67%	17.81%	11.06%

Volatility and Risk

Itex has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500. Comparatively, Healthcare Services Group has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Itex and Healthcare Services Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Itex	0	0	0	0	0.00
Healthcare Services Group	0	4	4	1	2.67

Healthcare Services Group has a consensus target price of $24.00, suggesting a potential downside of 0.54%. Given Healthcare Services Group’s stronger consensus rating and higher probable upside, analysts plainly believe Healthcare Services Group is more favorable than Itex.

Summary

Healthcare Services Group beats Itex on 11 of the 13 factors compared between the two stocks.

About Itex

ITEX Corporation operates a marketplace in which products and services are exchanged by marketplace members without exchanging cash in the United States. The company’s marketplace provides a forum for members to purchase from and sell their products and services to other members using ITEX dollars instead of United States dollars. It also administers the marketplace, as well as provides record-keeping and payment transaction processing services. In addition, the company services its member businesses through its independent licensed brokers and franchise network. ITEX Corporation was founded in 1982 and is headquartered in Bellevue, Washington.

About Healthcare Services Group

Healthcare Services Group, Inc. provides management, administrative, and operating services to the housekeeping, laundry, linen, facility maintenance, and dietary service departments of nursing homes, retirement complexes, rehabilitation centers, and hospitals in the United States. It operates through two segments, Housekeeping and Dietary. The Housekeeping segment engages in the cleaning, disinfecting, and sanitizing of resident rooms and common areas of the customers' facilities, as well as laundering and processing of the bed linens, uniforms, resident personal clothing, and other assorted linen items utilized at the customers' facilities. The Dietary segment provides food purchasing, meal preparation, and professional dietitian services, which include the development of menus that meet the dietary needs of residents; and on-site management and clinical consulting services to facilities. It serves long-term and post-acute care facilities, hospitals, and the healthcare industry through referrals and solicitation of target facilities. The company was incorporated in 1976 and is based in Bensalem, Pennsylvania.