Contrasting WageWorks (WAGE) & Willdan Group (WLDN)

WageWorks (NYSE: WAGE) and Willdan Group (NASDAQ:WLDN) are both business services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, dividends and risk.

Risk and Volatility

WageWorks has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500. Comparatively, Willdan Group has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500.

Profitability

This table compares WageWorks and Willdan Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
WageWorks 9.60% 9.52% 3.30%
Willdan Group 3.90% 18.91% 8.82%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for WageWorks and Willdan Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
WageWorks 0 1 4 0 2.80
Willdan Group 0 0 3 0 3.00

WageWorks currently has a consensus price target of $80.30, indicating a potential upside of 28.38%. Willdan Group has a consensus price target of $37.67, indicating a potential upside of 44.21%. Given Willdan Group’s stronger consensus rating and higher probable upside, analysts clearly believe Willdan Group is more favorable than WageWorks.

Earnings & Valuation

This table compares WageWorks and Willdan Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
WageWorks $364.71 million 6.81 $20.20 million $1.09 57.39
Willdan Group $208.94 million 1.08 $8.29 million $1.15 22.71

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

Insider & Institutional Ownership

59.9% of Willdan Group shares are held by institutional investors. 3.5% of WageWorks shares are held by company insiders. Comparatively, 13.3% of Willdan Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Willdan Group beats WageWorks on 8 of the 14 factors compared between the two stocks.

About WageWorks

WageWorks, Inc. is engaged in administering Consumer-Directed Benefits (CDBs). The Company administers CBDs, including pre-tax spending accounts, such as Health Savings Accounts (HSAs), health and dependent care Flexible Spending Accounts (FSAs), and Health Reimbursement Arrangements (HRAs), as well as Commuter Benefit Services, including transit and parking programs, wellness programs, Consolidated Omnibus Budget Reconciliation Act (COBRA) and other employee benefits. Its CDB programs assist employees and their families in saving money by using pre-tax dollars to pay for certain of their healthcare, dependent care and commuter expenses. Employers financially benefit from its programs through reduced payroll taxes. It provides operational support services to its clients and its cross-functional teams, including customer support and claims processing. It administers HSAs for employers that allow employee participants to invest funds to be used for qualified healthcare expenses.

About Willdan Group

Willdan Group, Inc. is a holding company. The Company provides professional technical and consulting services to utilities, private industry and public agencies at all levels of government, primarily in California and New York. It operates through four segments: Energy Efficiency Services, Engineering Services, Public Finance Services and Homeland Security Services. The Energy Efficiency Services segment provides energy efficiency consulting services to utilities, state agencies, municipalities, private industry and non-profit organizations. The Engineering Services segment offers a range of engineering and planning services to its public and private sector clients. The Public Finance Services segment provides support for the various financing techniques employed by public agencies to finance their operations and infrastructure. The Homeland Security Services segment provides national preparedness, homeland security consulting, public safety and emergency response services.

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