MAXIMUS (NYSE: MMS) and Performant Financial Corporation (NASDAQ:PFMT) are both industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, risk, valuation, institutional ownership, earnings and profitability.

Profitability

This table compares MAXIMUS and Performant Financial Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MAXIMUS 8.85% 23.43% 16.74%
Performant Financial Corporation -19.27% -15.22% -7.19%

Risk & Volatility

MAXIMUS has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, Performant Financial Corporation has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500.

Insider & Institutional Ownership

97.6% of MAXIMUS shares are owned by institutional investors. Comparatively, 54.7% of Performant Financial Corporation shares are owned by institutional investors. 3.1% of MAXIMUS shares are owned by company insiders. Comparatively, 33.6% of Performant Financial Corporation 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.

Analyst Recommendations

This is a breakdown of recent ratings for MAXIMUS and Performant Financial Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MAXIMUS 0 6 0 0 2.00
Performant Financial Corporation 0 1 0 0 2.00

MAXIMUS currently has a consensus price target of $61.33, suggesting a potential downside of 2.78%. Given MAXIMUS’s higher probable upside, research analysts plainly believe MAXIMUS is more favorable than Performant Financial Corporation.

Valuation and Earnings

This table compares MAXIMUS and Performant Financial Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
MAXIMUS $2.45 billion 1.67 $209.42 million $3.18 19.84
Performant Financial Corporation $141.36 million 0.65 -$11.45 million ($0.50) -3.60

MAXIMUS has higher revenue and earnings than Performant Financial Corporation. Performant Financial Corporation is trading at a lower price-to-earnings ratio than MAXIMUS, indicating that it is currently the more affordable of the two stocks.

Dividends

MAXIMUS pays an annual dividend of $0.18 per share and has a dividend yield of 0.3%. Performant Financial Corporation does not pay a dividend. MAXIMUS pays out 5.7% of its earnings in the form of a dividend.

Summary

MAXIMUS beats Performant Financial Corporation on 11 of the 13 factors compared between the two stocks.

MAXIMUS Company Profile

MAXIMUS, Inc. provides business process services (BPS) to government health and human services agencies. The Company operates through three segments: U.S. Federal Services, Health Services and Human Services. The U.S. Federal Services segment provides BPS and program management for large government programs, independent health review and appeals services for both the United States Federal Government, and state-based programs and technology solutions for civilian federal programs. The Health Services segment provides a range of BPS, as well as related consulting services, for state, provincial and national government programs. The Human Services segment provides national, state and local human services agencies with a range of BPS and related consulting services for welfare-to-work, child support, higher education and K-12 special education programs.

Performant Financial Corporation Company Profile

Performant Financial Corporation (Performant) provides technology-enabled recovery and related analytics services in the United States. The Company’s services identify and recover delinquent or defaulted assets and improper payments for both government and private clients in a range of markets. The Company provides its services on an outsourced basis where the Company handles many or all aspects of its clients’ recovery processes. The Company uses its technology-enabled services platform to provide recovery and analytics services in a range of markets for the identification and recovery of student loans, improper healthcare payments and delinquent state tax and federal treasury receivables. It provides recovery services to the government-supported student loan industry and its clients include the Department of Education and Guaranty Agencies, as well as private financial institutions. The Company provides recovery services related to improper payments in the healthcare market.

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