Critical Analysis: ABM Industries (NYSE:ABM) & Liquidity Services (NASDAQ:LQDT)

Liquidity Services (NASDAQ:LQDT) and ABM Industries (NYSE:ABM) are both industrials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Volatility and Risk

Liquidity Services has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500. Comparatively, ABM Industries has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500.

Institutional & Insider Ownership

71.2% of Liquidity Services shares are held by institutional investors. Comparatively, 91.6% of ABM Industries shares are held by institutional investors. 28.1% of Liquidity Services shares are held by insiders. Comparatively, 0.9% of ABM Industries shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations for Liquidity Services and ABM Industries, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Liquidity Services	0	0	2	1	3.33
ABM Industries	0	4	1	0	2.20

Liquidity Services currently has a consensus target price of $50.00, indicating a potential upside of 17.04%. ABM Industries has a consensus target price of $50.88, indicating a potential upside of 2.34%. Given Liquidity Services’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Liquidity Services is more favorable than ABM Industries.

Profitability

This table compares Liquidity Services and ABM Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Liquidity Services	6.79%	17.60%	9.86%
ABM Industries	1.82%	12.46%	4.03%

Earnings and Valuation

This table compares Liquidity Services and ABM Industries”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Liquidity Services	$489.62 million	2.73	$28.09 million	$1.02	41.88
ABM Industries	$8.75 billion	0.33	$162.30 million	$2.77	17.95

ABM Industries has higher revenue and earnings than Liquidity Services. ABM Industries is trading at a lower price-to-earnings ratio than Liquidity Services, indicating that it is currently the more affordable of the two stocks.

Summary

Liquidity Services beats ABM Industries on 11 of the 15 factors compared between the two stocks.

About Liquidity Services

Liquidity Services, Inc. provides e-commerce marketplaces, self-directed auction listing tools, and value-added services in the United States and internationally. The company operates through four segments: GovDeals, Retail Supply Chain Group (RSCG), Capital Assets Group (CAG), and Machinio. Its marketplaces include liquidation.com that enable corporations to sell surplus and salvage consumer goods and retail capital assets; GovDeals marketplace, which provides self-directed service solutions in which sellers list their own assets that enables local and state government entities, and commercial businesses located in the United States and Canada to sell surplus and salvage assets; and AllSurplus, a centralized marketplace that connects global buyer base with assets from across the network of marketplaces in a single destination. The company also offers a suite of services, including surplus management, asset valuation, asset sales, marketing, returns management, asset recovery, and ecommerce services. In addition, it operates a global search engine platform for listing used equipment for sale in the construction, machine tool, transportation, printing, and agriculture sectors. The company offers products from industry verticals, such as consumer electronics, general merchandise, apparel, scientific equipment, aerospace parts and equipment, technology hardware, real estate, energy equipment, industrial capital assets, heavy equipment, fleet and transportation equipment, and specialty equipment. The company was incorporated in 1999 and is headquartered in Bethesda, Maryland.

About ABM Industries

ABM Industries Incorporated, through its subsidiaries, engages in the provision of integrated facility, infrastructure, and mobility solutions in the United States and internationally. It operates through Business & Industry, Manufacturing & Distribution, Education, Aviation, and Technical Solutions segments. The company offers janitorial, facilities engineering, and parking services for commercial real estate properties, including corporate offices for high tech clients, sports and entertainment venues, and traditional hospitals and non-acute healthcare facilities; provides vehicle maintenance and other services to rental car providers. It also offers integrated facility services, engineering, and other specialized services in various types of manufacturing, distribution, and data center facilities. In addition, the company delivers custodial and landscaping and grounds for public school districts, private schools, colleges, and universities. Further, it supports airlines and airports with services comprising passenger assistance, catering logistics, air cabin maintenance, and transportation services. Additionally, the company provides electric vehicle power design, installation, and maintenance, as well as microgrid systems installations. ABM Industries Incorporated was founded in 1909 and is headquartered in New York, New York.