Financial Review: Sodexo (OTCMKTS:SDXAY) & Brookfield Business Partners (NYSE:BBU)

Sodexo (OTCMKTS:SDXAY) and Brookfield Business Partners (NYSE:BBU) are both mid-cap business services companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, risk, valuation, institutional ownership, analyst recommendations and earnings.

Profitability

This table compares Sodexo and Brookfield Business Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sodexo	N/A	N/A	N/A
Brookfield Business Partners	1.41%	2.67%	0.51%

Risk & Volatility

Sodexo has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500. Comparatively, Brookfield Business Partners has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Sodexo and Brookfield Business Partners, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sodexo	1	9	0	0	1.90
Brookfield Business Partners	2	0	5	0	2.43

Brookfield Business Partners has a consensus target price of $40.67, indicating a potential upside of 19.85%. Given Brookfield Business Partners’ stronger consensus rating and higher possible upside, analysts plainly believe Brookfield Business Partners is more favorable than Sodexo.

Earnings and Valuation

This table compares Sodexo and Brookfield Business Partners”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sodexo	$26.49 billion	0.31	$765.33 million	N/A	N/A
Brookfield Business Partners	$27.46 billion	0.11	-$26.00 million	($0.26)	-130.51

Sodexo has higher earnings, but lower revenue than Brookfield Business Partners.

Dividends

Sodexo pays an annual dividend of $0.45 per share and has a dividend yield of 4.0%. Brookfield Business Partners pays an annual dividend of $0.25 per share and has a dividend yield of 0.7%. Brookfield Business Partners pays out -96.2% of its earnings in the form of a dividend.

Insider & Institutional Ownership

85.0% of Brookfield Business Partners shares are held by institutional investors. 1.0% of Sodexo shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Brookfield Business Partners beats Sodexo on 10 of the 14 factors compared between the two stocks.

About Sodexo

Sodexo S.A. provides food services and facilities management services worldwide. It offers various on-site services, which includes corporate services, energy and resources, government and agencies, and other services; healthcare and seniors; and learning solutions to schools and universities. The company also provides food services comprising retail service, food delivery, and meal and food vouchers, as well as digital food ordering services; savings and purchase solutions, data and digital tools, and advisory services and client support; and work-life balance and employee experience solutions. In addition, it offers facility management services, including technical service management, assets management, building maintenance, access control, deep cleaning, energy management, space planning, project management, front-of-house services, grounds maintenance, waste management, HVAC systems, mail management, commercial cleaning, workspace management, and pest control. services. The company was formerly known as Sodexho Alliance and changed its name to Sodexo S.A. in 2008. Sodexo S.A. was founded in 1966 and is headquartered in Issy-les-Moulineaux, France.

About Brookfield Business Partners

Brookfield Business Partners L.P. is a private equity firm specializing in acquisition. The firm typically invests in business services, infrastructure services, construction, energy, and industrials sector. It prefers to take majority stake in companies. The firm seeks returns of at least 15% on its investments. Brookfield Business Partners L.P. was founded in 2016 and is based in Hamilton, Bermuda. Brookfield Business Partners L.P. operates as a subsidiary of Brookfield Corporation.