Contrasting Aramark (NYSE:ARMK) & Acacia Research (NASDAQ:ACTG)

Aramark (NYSE:ARMK) and Acacia Research (NASDAQ:ACTG) are both business services companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, earnings, risk and dividends.

Analyst Recommendations

This is a summary of current ratings and target prices for Aramark and Acacia Research, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aramark	0	2	7	0	2.78
Acacia Research	1	0	0	0	1.00

Aramark presently has a consensus target price of $48.38, suggesting a potential upside of 20.85%. Given Aramark’s stronger consensus rating and higher probable upside, equities analysts clearly believe Aramark is more favorable than Acacia Research.

Risk & Volatility

Aramark has a beta of 1.06, indicating that its stock price is 6% more volatile than the S&P 500. Comparatively, Acacia Research has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500.

Profitability

This table compares Aramark and Acacia Research’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aramark	1.69%	16.15%	3.75%
Acacia Research	1.70%	2.45%	1.80%

Institutional and Insider Ownership

86.7% of Acacia Research shares are owned by institutional investors. 2.8% of Aramark shares are owned by company insiders. Comparatively, 1.7% of Acacia Research shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Aramark and Acacia Research”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aramark	$18.51 billion	0.57	$326.39 million	$1.19	33.64
Acacia Research	$122.31 million	3.34	-$36.06 million	$0.05	84.60

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

Summary

Aramark beats Acacia Research on 10 of the 14 factors compared between the two stocks.

About Aramark

Aramark provides food and facilities services to education, healthcare, business and industry, sports, leisure, and corrections clients in the United States and internationally. It operates through two segments, Food and Support Services United States, and Food and Support Services International. The company offers food-related managed services, including dining, catering, food service management, and convenience-oriented retail services; non-clinical food and food-related support services, such as patient food and nutrition, retail food, environmental services, and procurement services; and plant operations and maintenance, custodial/housekeeping, energy management, grounds keeping, and capital project management services. It also provides on-site restaurants, catering, convenience stores, and executive dining services; beverage and vending services; and facility management services comprising landscaping, transportation, capital program management, payment services, and other facility consulting services relating to building operations. In addition, the company offers concessions, banquet, and catering services; retail services and merchandise sale, recreational, and lodging services; and facility management services at sports, entertainment, and recreational facilities. Further, it offers correctional food; and operates commissaries, laundry facilities, and property rooms. It primarily serves business and industry, sports, leisure and corrections, education, healthcare, public institutions, manufacturing, transportation, service, and other industries. The company was formerly known as ARAMARK Holdings Corporation. Aramark was founded in 1959 and is based in Philadelphia, Pennsylvania.

About Acacia Research

Acacia is a publicly traded (Nasdaq: ACTG) company that is focused on acquiring and operating businesses across the industrial, energy and technology sectors where it believes it can leverage its expertise, significant capital base, and deep industry relationships to drive value. Acacia evaluates opportunities based on the attractiveness of the underlying cash flows, without regard to a specific investment horizon. Acacia operates its businesses based on three key principles of people, process, and performance and has built a management team with demonstrated expertise in research, transactions and execution, and operations and management.