CBIZ (CBZ) & Exponent (EXPO) Critical Analysis

Exponent (NASDAQ: EXPO) and CBIZ (NYSE:CBZ) are both small-cap business services companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, earnings, dividends and risk.

Institutional & Insider Ownership

88.6% of Exponent shares are held by institutional investors. Comparatively, 84.1% of CBIZ shares are held by institutional investors. 2.8% of Exponent shares are held by company insiders. Comparatively, 6.9% of CBIZ shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Exponent and CBIZ’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Exponent $315.08 million 5.88 $47.48 million $2.05 35.02
CBIZ $799.83 million 1.11 $40.06 million $0.81 20.06

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

Dividends

Exponent pays an annual dividend of $0.84 per share and has a dividend yield of 1.2%. CBIZ does not pay a dividend. Exponent pays out 41.0% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current ratings and price targets for Exponent and CBIZ, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Exponent 0 1 1 0 2.50
CBIZ 0 0 0 0 N/A

Exponent currently has a consensus price target of $79.50, indicating a potential upside of 10.72%. Given Exponent’s higher probable upside, research analysts plainly believe Exponent is more favorable than CBIZ.

Profitability

This table compares Exponent and CBIZ’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Exponent 16.46% 17.21% 11.99%
CBIZ 5.34% 8.94% 4.05%

Risk & Volatility

Exponent has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500. Comparatively, CBIZ has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500.

Summary

Exponent beats CBIZ on 11 of the 15 factors compared between the two stocks.

Exponent Company Profile

Exponent, Inc. (Exponent), along with its subsidiaries, is a science and engineering consulting company. Exponent provides engineering and scientific consulting services to clients around the world. Its service offerings are provided on a project-by-project basis. It operates in two segments: Engineering and Other Scientific, and Environmental and Health. Its Engineering and Other Scientific segment includes biomechanics, biomedical engineering, buildings and structures, civil engineering, construction consulting, materials and corrosion engineering, mechanical engineering, polymer science and materials chemistry, statistical and data sciences, thermal sciences and vehicle analysis services. Its Environmental and Health segment includes chemical regulation and food safety; ecological and biological sciences; environmental and earth sciences, and health sciences. Exponent serves clients in automotive, government, health, insurance, manufacturing and technology, among others.

CBIZ Company Profile

CBIZ, Inc. (CBIZ) is engaged in the professional services business. The Company operates its professional services business through acquiring and integrating accounting and financial service providers, group health benefits consulting firms, property and casualty brokerage firms, payroll service providers, and valuation and other service firms throughout the United States. Its segments include Financial Services, Benefits and Insurance Services, National Practices, and Corporate and Other. The Financial Services group includes accounting and tax, government healthcare consulting, financial advisory, valuation, and risk and advisory services. The Benefits and Insurance Services group includes group health benefits consulting, payroll, property and casualty, and retirement plan services. The National Practices segment includes managed networking and hardware services, and healthcare consulting.

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