Exponent (NASDAQ: EXPO) and H&E Equipment Services (NASDAQ:HEES) are both small-cap business support services – nec companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, profitability, earnings and dividends.

Volatility and Risk

Exponent has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500. Comparatively, H&E Equipment Services has a beta of 2.88, meaning that its share price is 188% more volatile than the S&P 500.

Earnings & Valuation

This table compares Exponent and H&E Equipment Services’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Exponent $315.08 million 5.87 $47.48 million $2.05 34.93
H&E Equipment Services $978.14 million 1.24 $37.17 million $1.02 33.29

Exponent has higher revenue, but lower earnings than H&E Equipment Services. H&E Equipment Services is trading at a lower price-to-earnings ratio than Exponent, indicating that it is currently the more affordable of the two stocks.

Dividends

Exponent pays an annual dividend of $0.84 per share and has a dividend yield of 1.2%. H&E Equipment Services pays an annual dividend of $1.10 per share and has a dividend yield of 3.2%. Exponent pays out 41.0% of its earnings in the form of a dividend. H&E Equipment Services pays out 107.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Exponent and H&E Equipment Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Exponent 16.46% 17.21% 11.99%
H&E Equipment Services 3.69% 38.83% 4.30%

Insider & Institutional Ownership

88.9% of Exponent shares are held by institutional investors. Comparatively, 76.2% of H&E Equipment Services shares are held by institutional investors. 2.8% of Exponent shares are held by insiders. Comparatively, 12.3% of H&E Equipment Services shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations for Exponent and H&E Equipment Services, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Exponent 0 1 1 0 2.50
H&E Equipment Services 0 0 2 0 3.00

Exponent currently has a consensus target price of $79.50, suggesting a potential upside of 11.03%. H&E Equipment Services has a consensus target price of $31.50, suggesting a potential downside of 7.24%. Given Exponent’s higher probable upside, analysts plainly believe Exponent is more favorable than H&E Equipment Services.

Summary

Exponent beats H&E Equipment Services on 9 of the 16 factors compared between the two stocks.

About Exponent

Exponent, Inc. (Exponent), along with its subsidiaries, is a science and engineering consulting company. Exponent provides engineering and scientific consulting services to clients around the world. Its service offerings are provided on a project-by-project basis. It operates in two segments: Engineering and Other Scientific, and Environmental and Health. Its Engineering and Other Scientific segment includes biomechanics, biomedical engineering, buildings and structures, civil engineering, construction consulting, materials and corrosion engineering, mechanical engineering, polymer science and materials chemistry, statistical and data sciences, thermal sciences and vehicle analysis services. Its Environmental and Health segment includes chemical regulation and food safety; ecological and biological sciences; environmental and earth sciences, and health sciences. Exponent serves clients in automotive, government, health, insurance, manufacturing and technology, among others.

About H&E Equipment Services

H&E Equipment Services, Inc. is an integrated equipment services company. The Company is focused on heavy construction and industrial equipment. As of December 31, 2016, the Company rented, sold and provided parts and services support for four core categories of specialized equipment: hi-lift or aerial work platform equipment; cranes; earthmoving equipment, and industrial lift trucks. The Company’s principal business activities include equipment rentals; new equipment sales; used equipment sales; parts sales, and repair and maintenance services. As of February 16, 2017, the Company had 78 facilities located throughout the West Coast, Intermountain, Southwest, Gulf Coast, Southeast and Mid-Atlantic regions of the United States. The Company rents its heavy construction and industrial equipment to its customers on a daily, weekly and monthly basis. The Company sells new heavy construction and industrial equipment. The Company is a distributor of Grove and Manitowoc crane equipment.

Receive News & Ratings for Exponent Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Exponent Inc. and related companies with MarketBeat.com's FREE daily email newsletter.