WageWorks (WAGE) vs. G&K Services (GK) Head-To-Head Comparison

WageWorks (NYSE: WAGE) and G&K Services (NASDAQ:GK) are both industrials companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, profitability, earnings, risk, analyst recommendations, institutional ownership and dividends.

Profitability

This table compares WageWorks and G&K Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
WageWorks 9.87% 9.60% 3.37%
G&K Services 3.79% 9.12% 4.03%

Dividends

G&K Services pays an annual dividend of $1.56 per share and has a dividend yield of 1.6%. WageWorks does not pay a dividend. G&K Services pays out 54.7% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares WageWorks and G&K Services’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
WageWorks $364.71 million 6.72 $20.20 million $1.17 52.82
G&K Services N/A N/A N/A $2.85 34.21

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

Analyst Ratings

This is a summary of current ratings and target prices for WageWorks and G&K Services, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
WageWorks 0 1 4 0 2.80
G&K Services 0 0 0 0 N/A

WageWorks presently has a consensus price target of $83.00, indicating a potential upside of 34.30%. Given WageWorks’ higher probable upside, research analysts clearly believe WageWorks is more favorable than G&K Services.

Institutional and Insider Ownership

88.6% of G&K Services shares are owned by institutional investors. 3.5% of WageWorks shares are owned by company insiders. Comparatively, 3.7% of G&K Services shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

WageWorks beats G&K Services on 7 of the 12 factors compared between the two stocks.

WageWorks Company Profile

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.

G&K Services Company Profile

G&K Services, Inc. is a service-focused provider of branded uniform and facility services programs. The Company provides a range of workwear and protective safety apparel through rental and direct purchase programs. The Company also supplies various facility products and services, including floor mats, towels, mops, restroom hygiene products, and first aid supplies. It also manufactures certain work apparel garments that are used to support its garment rental and direct purchase programs. It operates in two segments: United States (includes the Dominican Republic) and Canada. The Company operated from approximately 160 locations, as of July 2, 2016. The Company serves a diverse base of customer locations in various industries, including automotive, warehousing, distribution, transportation, energy, manufacturing, food processing, retail, restaurants, construction and trades, hospitality, government, healthcare and others.

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