Atento (NYSE: ATTO) and Brady (NYSE:BRC) are both small-cap business services companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, profitability, dividends, earnings, valuation and institutional ownership.

Volatility & Risk

Atento has a beta of -0.13, indicating that its share price is 113% less volatile than the S&P 500. Comparatively, Brady has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500.

Valuation & Earnings

This table compares Atento and Brady’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Atento $1.76 billion 0.39 $60,000.00 $0.14 66.43
Brady $1.11 billion 1.71 $95.64 million $1.88 19.60

Brady has lower revenue, but higher earnings than Atento. Brady is trading at a lower price-to-earnings ratio than Atento, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and target prices for Atento and Brady, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atento 0 1 2 0 2.67
Brady 0 2 2 0 2.50

Atento presently has a consensus target price of $14.67, indicating a potential upside of 57.71%. Brady has a consensus target price of $40.50, indicating a potential upside of 9.91%. Given Atento’s stronger consensus rating and higher possible upside, equities analysts plainly believe Atento is more favorable than Brady.

Dividends

Atento pays an annual dividend of $0.34 per share and has a dividend yield of 3.7%. Brady pays an annual dividend of $0.83 per share and has a dividend yield of 2.3%. Atento pays out 242.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Brady pays out 44.1% of its earnings in the form of a dividend. Brady has increased its dividend for 32 consecutive years.

Insider & Institutional Ownership

96.0% of Atento shares are held by institutional investors. Comparatively, 77.1% of Brady shares are held by institutional investors. 15.6% of Brady shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Atento and Brady’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atento 0.52% 12.63% 3.81%
Brady 8.81% 13.90% 9.14%

Summary

Brady beats Atento on 10 of the 16 factors compared between the two stocks.

Atento Company Profile

Atento S.A. is a provider of customer-relationship management and business-process outsourcing (CRM BPO) services and solutions in Latin America. The Company offers a portfolio of CRM BPO services, including customer care, sales, collections, back office and technical support. The Company operates through three segments: EMEA, Americas and Brazil. Its services and solutions are delivered across multiple channels including digital (short message service (SMS), e-mail, chats, social media and applications, among others) and voice, and are enabled by process design, technology and intelligence functions. The Company also has client relationships across a range of industries working in sectors, such as telecommunications, banking and financial services and multi-sector, which comprise the consumer goods, services, public administration, pay television, healthcare, transportation, technology and media industries.

Brady Company Profile

Brady Corporation is a manufacturer and supplier of identification solutions and workplace safety products that identify and protect premises, products and people. The Company has two segments: Identification Solutions (IDS) and Workplace Safety (WPS). The IDS segment includes identification and healthcare products, and the WPS segment includes workplace safety and compliance products. The IDS segment offers products that are manufactured under various brands, including the Brady brand, and are primarily sold through distribution to a range of maintenance, repair and operations (MRO) and original equipment manufacturing (OEM) customers, and through other channels. The WPS segment offers a range of product categories, such as safety and compliance signs, tags, and labels; informational and architectural signage; industrial warehouse and office equipment, and labor law compliance posters. Its brands include Electromark, Identicard, PromoVision, Scafftag, Seton and Emedco.

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