Critical Analysis: DLH Holdings Corp. (NASDAQ:DLHC) and Engility Holdings (EGL)
DLH Holdings Corp. (NASDAQ: DLHC) and Engility Holdings (NYSE:EGL) are both small-cap business services companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitabiliy, risk, institutional ownership, dividends, analyst recommendations, valuation and earnings.
This is a breakdown of current recommendations and price targets for DLH Holdings Corp. and Engility Holdings, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|DLH Holdings Corp.||0||0||2||0||3.00|
DLH Holdings Corp. currently has a consensus target price of $6.75, indicating a potential upside of 18.01%. Engility Holdings has a consensus target price of $35.00, indicating a potential upside of 18.04%. Given Engility Holdings’ higher probable upside, analysts plainly believe Engility Holdings is more favorable than DLH Holdings Corp..
Institutional and Insider Ownership
51.0% of DLH Holdings Corp. shares are held by institutional investors. Comparatively, 92.0% of Engility Holdings shares are held by institutional investors. 21.6% of DLH Holdings Corp. shares are held by company insiders. Comparatively, 0.4% of Engility Holdings shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Risk and Volatility
DLH Holdings Corp. has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500. Comparatively, Engility Holdings has a beta of 2.1, meaning that its share price is 110% more volatile than the S&P 500.
This table compares DLH Holdings Corp. and Engility Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|DLH Holdings Corp.||4.13%||14.32%||6.82%|
Valuation & Earnings
This table compares DLH Holdings Corp. and Engility Holdings’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|DLH Holdings Corp.||$108.13 million||0.60||$7.68 million||$0.38||15.05|
|Engility Holdings||$2.04 billion||0.53||$192.00 million||($0.03)||-988.33|
Engility Holdings has higher revenue and earnings than DLH Holdings Corp.. Engility Holdings is trading at a lower price-to-earnings ratio than DLH Holdings Corp., indicating that it is currently the more affordable of the two stocks.
Engility Holdings Company Profile
Engility Holdings, Inc. (Engility) is a provider of systems engineering services, training, program management, and operational support for the United States Government worldwide. The Company’s business is focused on providing a range of engineering, technical, analytical, advisory, training, logistics and support services. The Company operates in two segments: Professional Support Services and Mission Support Services. The Professional Support Services segment provides Systems Engineering and Technical Assistance (SETA) services, program management support and software engineering lifecycle sustainment and support services. Through its Mission Support Services segment, it provides capabilities, such as defense related training, education and support services, law enforcement training, national security infrastructure and institutional development. In January 2014, Engility Holdings Inc completed the acquisition of Dynamics Research Corp.
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