Mistras Group (MG) versus MAXIMUS (NYSE:MMS) Critical Review

MAXIMUS (NYSE: MMS) and Mistras Group (NYSE:MG) are both business services companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, profitability, earnings, dividends, institutional ownership, analyst recommendations and risk.

Analyst Ratings

This is a breakdown of current ratings and target prices for MAXIMUS and Mistras Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MAXIMUS 0 4 1 0 2.20
Mistras Group 1 5 1 0 2.00

MAXIMUS currently has a consensus target price of $62.60, indicating a potential downside of 12.14%. Mistras Group has a consensus target price of $36.33, indicating a potential upside of 61.99%. Given Mistras Group’s higher probable upside, analysts clearly believe Mistras Group is more favorable than MAXIMUS.

Profitability

This table compares MAXIMUS and Mistras Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MAXIMUS 8.54% 23.97% 15.63%
Mistras Group 0.68% 6.16% 3.48%

Insider and Institutional Ownership

94.8% of MAXIMUS shares are owned by institutional investors. Comparatively, 61.9% of Mistras Group shares are owned by institutional investors. 3.1% of MAXIMUS shares are owned by insiders. Comparatively, 44.7% of Mistras Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

MAXIMUS pays an annual dividend of $0.18 per share and has a dividend yield of 0.3%. Mistras Group does not pay a dividend. MAXIMUS pays out 5.7% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares MAXIMUS and Mistras Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MAXIMUS $2.45 billion 1.89 $209.42 million $3.18 22.41
Mistras Group $719.18 million 0.88 $24.65 million $0.14 160.23

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

Risk & Volatility

MAXIMUS has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500. Comparatively, Mistras Group has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500.

Summary

MAXIMUS beats Mistras Group on 11 of the 15 factors compared between the two stocks.

MAXIMUS Company Profile

MAXIMUS, Inc. provides business process services (BPS) to government health and human services agencies. The Company operates through three segments: U.S. Federal Services, Health Services and Human Services. The U.S. Federal Services segment provides BPS and program management for large government programs, independent health review and appeals services for both the United States Federal Government, and state-based programs and technology solutions for civilian federal programs. The Health Services segment provides a range of BPS, as well as related consulting services, for state, provincial and national government programs. The Human Services segment provides national, state and local human services agencies with a range of BPS and related consulting services for welfare-to-work, child support, higher education and K-12 special education programs.

Mistras Group Company Profile

Mistras Group, Inc. offers asset protection solutions and is a provider of technology-enabled asset protection solutions used to evaluate the structural integrity and reliability of critical energy, industrial and public infrastructure. The Company’s segments are Services segment, which provides asset protection solutions in North America with concentration on the United States along with a Canadian services business, consisting of non-destructive testing, and inspection and engineering services that are used to evaluate structural integrity and reliability of critical energy, industrial and public infrastructure; International segment, which offers services, products and systems similar to those of its Services and Products and Systems segments to markets in Europe, the Middle East, Africa, Asia and South America, and Products and Systems segment, which designs, manufactures, sells, installs and services asset protection products and systems, including equipment and instrumentation.

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