Financial Review: UL Solutions (NYSE:ULS) and Recruit (OTCMKTS:RCRUY)

Recruit (OTCMKTS:RCRUY) and UL Solutions (NYSE:ULS) are both large-cap industrials companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.

Profitability

This table compares Recruit and UL Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Recruit	14.94%	35.54%	20.88%
UL Solutions	16.02%	28.81%	13.25%

Dividends

Recruit pays an annual dividend of $0.02 per share and has a dividend yield of 0.1%. UL Solutions pays an annual dividend of $0.58 per share and has a dividend yield of 0.9%. Recruit pays out 3.8% of its earnings in the form of a dividend. UL Solutions pays out 23.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Volatility and Risk

Recruit has a beta of 1.74, suggesting that its stock price is 74% more volatile than the S&P 500. Comparatively, UL Solutions has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Recruit and UL Solutions, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Recruit	0	1	0	0	2.00
UL Solutions	0	5	6	0	2.55

UL Solutions has a consensus target price of $96.78, indicating a potential upside of 51.21%. Given UL Solutions’ stronger consensus rating and higher probable upside, analysts plainly believe UL Solutions is more favorable than Recruit.

Valuation & Earnings

This table compares Recruit and UL Solutions”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Recruit	$24.56 billion	6.63	$3.28 billion	$0.52	42.54
UL Solutions	$3.05 billion	4.23	$325.00 million	$2.47	25.91

Recruit has higher revenue and earnings than UL Solutions. UL Solutions is trading at a lower price-to-earnings ratio than Recruit, indicating that it is currently the more affordable of the two stocks.

Summary

Recruit beats UL Solutions on 8 of the 14 factors compared between the two stocks.

About Recruit

Recruit Holdings Co., Ltd. provides HR technology and business solutions that transforms the world of work. It operates through three segments: HR Technology, Matching & Solutions, and Staffing. The HR Technology segment provides various technological solutions that help job seekers and employers in navigating hiring and recruitment. The Matching & Solutions segment offers HR solutions that support business clients’ recruiting and hiring activities and individual users’ job search activities through its job advertising services and placement services. This segment also provides marketing solutions that provide matching platforms for businesses in various industries, including housing and real estate, beauty, bridal, travel, dining, and others, as well as SaaS solutions, which are business and management support tools for small and medium-sized companies. The Staffing segment provides temporary staffing services in Japan, Europe, the United States, and Australia. Recruit Holdings Co., Ltd. operates in more than 60 countries. The company was formerly known as Recruit Co., Ltd. and changed its name to Recruit Holdings Co., Ltd. in October 2012. Recruit Holdings Co., Ltd. was founded in 1960 and is headquartered in Tokyo, Japan.

About UL Solutions

UL Solutions Inc. provides safety science services worldwide. It operates through three segments: Industrial, Consumer, and Software and Advisory. The Industrial segment provides testing, inspection, and certification services across various end markets, including energy, industrial automation, engineered materials, and built environment, as well as stakeholders, such as manufacturers, building owners, end users, and regulators. The Consumer segment offers safety certification testing, ongoing certification, global market access, testing for connectivity, performance and quality, and critical systems advisory and training services, as well as product market acceptance and risk mitigation services for customers in the consumer products end markets comprising consumer electronics, medical devices, information technologies, appliances, HVAC, lighting, and retail, as well as consumer applications, such as new mobility, smart products, and 5G. The Software and Advisory segment provide software and technical advisory services that enable customers to manage regulatory requirements, deliver supply chain transparency, and operationalize sustainability for regulated industries, including life sciences, supply chain regulations, transparency needs, and new ESG and sustainability requirements. It offers ULTRUS software brand to help customers improve speed to market, sustainability and safety. UL Solutions Inc. was formerly known as UL Inc. and changed its name to UL Solutions Inc. in June 2022. The company was founded in 1894 and is headquartered in Northbrook, Illinois with additional offices in North America, Asia Pacific, Africa, Europe, Latin America, and Middle East. UL Solutions Inc. operates as a subsidiary of ULSE Inc.