Head-To-Head Review: Information Services Group (III) & ServiceMaster Global Holdings (SERV)

Information Services Group (NASDAQ: III) and ServiceMaster Global Holdings (NYSE:SERV) are both business services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, profitability, institutional ownership and valuation.

Profitability

This table compares Information Services Group and ServiceMaster Global Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Information Services Group -2.97% -4.66% -1.21%
ServiceMaster Global Holdings 8.16% 40.22% 5.42%

Insider & Institutional Ownership

40.5% of Information Services Group shares are held by institutional investors. 12.0% of Information Services Group shares are held by company insiders. Comparatively, 1.2% of ServiceMaster Global Holdings shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Information Services Group has a beta of 0.37, meaning that its share price is 63% less volatile than the S&P 500. Comparatively, ServiceMaster Global Holdings has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Information Services Group and ServiceMaster Global Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Information Services Group 0 0 2 0 3.00
ServiceMaster Global Holdings 2 2 7 0 2.45

Information Services Group currently has a consensus target price of $6.50, indicating a potential upside of 62.50%. ServiceMaster Global Holdings has a consensus target price of $48.45, indicating a potential upside of 4.34%. Given Information Services Group’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Information Services Group is more favorable than ServiceMaster Global Holdings.

Earnings and Valuation

This table compares Information Services Group and ServiceMaster Global Holdings’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Information Services Group $216.50 million 0.80 -$6.50 million ($0.21) -19.05
ServiceMaster Global Holdings $2.75 billion 2.28 $155.00 million $1.74 26.69

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

Summary

ServiceMaster Global Holdings beats Information Services Group on 9 of the 13 factors compared between the two stocks.

About Information Services Group

Information Services Group, Inc. is a technology insights, market intelligence and advisory services company. The Company operates in the segment of fact-based sourcing advisory services. It supports private and public sector organizations to transform and optimize their operational environments through research, benchmarking, consulting and managed services with a focus on information technology, business process transformation, program management services and enterprise resource planning. It offers service lines, including research, consulting, managed services, network carrier services, robotic process automation (RPA), outsourcing advisory and provider services. It specializes in digital transformation services, including automation, cloud and data analytics; managed governance and risk services; network carrier services; technology strategy and operations design; change management, and technology research and analysis.

About ServiceMaster Global Holdings

ServiceMaster Global Holdings, Inc. is a provider of essential residential and commercial services. The Company operates through three segments: Terminix, American Home Shield and the Franchise Services Group. Its portfolio of brands includes Terminix, American Home Shield, ServiceMaster Restore, ServiceMaster Clean, Merry Maids, Furniture Medic and AmeriSpec. The Terminix segment provides termite and pest control services in the United States. The American Home Shield segment provides home warranty plans that cover the repair or replacement of components of up to 21 household systems and appliances, including electrical, plumbing, central heating and air conditioning (HVAC) systems, dishwashers and ovens/cook tops. The Franchise Services Group segment consists of the ServiceMaster Restore (disaster restoration), ServiceMaster Clean (janitorial), Merry Maids (residential cleaning), Furniture Medic (cabinet and wood furniture repair) and AmeriSpec (home inspection) businesses.

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