Analyzing Healthcare Services Group (NASDAQ:HCSG) and Crawford & Company (NYSE:CRD.B)

Healthcare Services Group (NASDAQ:HCSG) and Crawford & Company (NYSE:CRD.B) are both small-cap business services companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, profitability, institutional ownership, analyst recommendations, risk and valuation.

Insider & Institutional Ownership

98.0% of Healthcare Services Group shares are held by institutional investors. Comparatively, 11.0% of Crawford & Company shares are held by institutional investors. 2.6% of Healthcare Services Group shares are held by company insiders. Comparatively, 51.0% of Crawford & Company shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Healthcare Services Group and Crawford & Company, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Healthcare Services Group	0	1	3	0	2.75
Crawford & Company	0	0	0	0	0.00

Healthcare Services Group presently has a consensus price target of $16.25, suggesting a potential upside of 6.42%. Given Healthcare Services Group’s stronger consensus rating and higher probable upside, research analysts clearly believe Healthcare Services Group is more favorable than Crawford & Company.

Earnings and Valuation

This table compares Healthcare Services Group and Crawford & Company”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Healthcare Services Group	$1.77 billion	0.62	$39.47 million	$0.14	109.07
Crawford & Company	$1.34 billion	0.38	$26.60 million	$0.59	17.63

Healthcare Services Group has higher revenue and earnings than Crawford & Company. Crawford & Company is trading at a lower price-to-earnings ratio than Healthcare Services Group, indicating that it is currently the more affordable of the two stocks.

Dividends

Healthcare Services Group pays an annual dividend of $0.86 per share and has a dividend yield of 5.6%. Crawford & Company pays an annual dividend of $0.28 per share and has a dividend yield of 2.7%. Healthcare Services Group pays out 614.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Crawford & Company pays out 47.5% of its earnings in the form of a dividend.

Volatility and Risk

Healthcare Services Group has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500. Comparatively, Crawford & Company has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500.

Profitability

This table compares Healthcare Services Group and Crawford & Company’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Healthcare Services Group	0.61%	11.74%	7.19%
Crawford & Company	2.18%	25.91%	5.26%

Summary

Healthcare Services Group beats Crawford & Company on 10 of the 16 factors compared between the two stocks.

About Healthcare Services Group

Healthcare Services Group, Inc. provides management, administrative, and operating services to the housekeeping, laundry, linen, facility maintenance, and dietary service departments of nursing homes, retirement complexes, rehabilitation centers, and hospitals in the United States. It operates through two segments, Housekeeping and Dietary. The Housekeeping segment engages in the cleaning, disinfecting, and sanitizing of resident rooms and common areas of the customers' facilities, as well as laundering and processing of the bed linens, uniforms, resident personal clothing, and other assorted linen items utilized at the customers' facilities. The Dietary segment provides food purchasing, meal preparation, and professional dietitian services, which include the development of menus that meet the dietary needs of residents; and on-site management and clinical consulting services to facilities. It serves long-term and post-acute care facilities, hospitals, and the healthcare industry through referrals and solicitation of target facilities. The company was incorporated in 1976 and is based in Bensalem, Pennsylvania.

About Crawford & Company

Crawford & Co. engages in the provision of claims management and outsourcing solutions to carriers, brokers, and corporates. It operates through the following segments: Crawford Loss Adjusting, Crawford TPA Solutions, and Crawford Platform Solutions. The Crawford Loss Adjusting segment consists of adjusting services provided to insurance companies and self-insured entities related to property and casualty losses caused by physical damage to commercial and residential real property and certain types of personal property. The Crawford TPA Solutions segment provides third party administration for workers’ compensation, auto and liability, disability absence management, medical management, and accident and health to corporations, brokers, and insurers worldwide. The Crawford Platform Solutions segment is involved in the management of contractor networks and the provision of claims management services to insurance companies and self-insured entities related to property, casualty, and catastrophic losses. The company was founded by Jim Crawford in 1941 and is headquartered in Peachtree Corners, GA.