Head to Head Analysis: Engility Holdings (EGL) versus DLH Holdings Corp. (DLHC)

Engility Holdings (NYSE: EGL) and DLH Holdings Corp. (NASDAQ:DLHC) are both small-cap aerospace companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, valuation, dividends, profitabiliy, risk and analyst recommendations.

Institutional & Insider Ownership

92.0% of Engility Holdings shares are owned by institutional investors. Comparatively, 51.0% of DLH Holdings Corp. shares are owned by institutional investors. 0.4% of Engility Holdings shares are owned by company insiders. Comparatively, 21.6% of DLH Holdings Corp. 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 Engility Holdings and DLH Holdings Corp.’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Engility Holdings $2.04 billion 0.53 $192.00 million ($0.03) -986.67
DLH Holdings Corp. $108.13 million 0.59 $7.68 million $0.38 15.03

Engility Holdings has higher revenue and earnings than DLH Holdings Corp.. Engility Holdings is trading at a lower price-to-earnings ratio than DLH Holdings Corp., indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Engility Holdings has a beta of 2.1, indicating that its share price is 110% more volatile than the S&P 500. Comparatively, DLH Holdings Corp. has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Engility Holdings and DLH Holdings Corp., as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Engility Holdings 0 2 5 0 2.71
DLH Holdings Corp. 0 0 2 0 3.00

Engility Holdings currently has a consensus target price of $35.00, suggesting a potential upside of 18.24%. DLH Holdings Corp. has a consensus target price of $6.75, suggesting a potential upside of 18.17%. Given Engility Holdings’ higher possible upside, equities analysts clearly believe Engility Holdings is more favorable than DLH Holdings Corp..

Profitability

This table compares Engility Holdings and DLH Holdings Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Engility Holdings -0.03% 10.19% 3.27%
DLH Holdings Corp. 4.13% 14.32% 6.82%

Summary

DLH Holdings Corp. beats Engility Holdings on 7 of the 13 factors compared between the two stocks.

Engility Holdings Company Profile

Engility Holdings, Inc. (Engility) is a provider of systems engineering services, training, program management, and operational support for the United States Government worldwide. The Company’s business is focused on providing a range of engineering, technical, analytical, advisory, training, logistics and support services. The Company operates in two segments: Professional Support Services and Mission Support Services. The Professional Support Services segment provides Systems Engineering and Technical Assistance (SETA) services, program management support and software engineering lifecycle sustainment and support services. Through its Mission Support Services segment, it provides capabilities, such as defense related training, education and support services, law enforcement training, national security infrastructure and institutional development. In January 2014, Engility Holdings Inc completed the acquisition of Dynamics Research Corp.

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