The Hackett Group (NASDAQ: HCKT) and FTI Consulting (NYSE:FCN) are both small-cap business services companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitabiliy, earnings, institutional ownership, valuation, dividends and risk.

Volatility and Risk

The Hackett Group has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500. Comparatively, FTI Consulting has a beta of 0.29, indicating that its stock price is 71% less volatile than the S&P 500.

Profitability

This table compares The Hackett Group and FTI Consulting’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Hackett Group 8.60% 28.73% 15.56%
FTI Consulting 3.88% 6.06% 3.25%

Earnings & Valuation

This table compares The Hackett Group and FTI Consulting’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
The Hackett Group $263.00 million 1.83 $40.34 million $0.77 21.35
FTI Consulting $1.79 billion 0.76 $165.11 million $1.67 20.01

FTI Consulting has higher revenue and earnings than The Hackett Group. FTI Consulting is trading at a lower price-to-earnings ratio than The Hackett Group, indicating that it is currently the more affordable of the two stocks.

Dividends

The Hackett Group pays an annual dividend of $0.30 per share and has a dividend yield of 1.8%. FTI Consulting does not pay a dividend. The Hackett Group pays out 39.0% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current recommendations for The Hackett Group and FTI Consulting, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Hackett Group 0 2 3 0 2.60
FTI Consulting 0 3 0 0 2.00

The Hackett Group presently has a consensus price target of $19.25, indicating a potential upside of 17.09%. FTI Consulting has a consensus price target of $43.00, indicating a potential upside of 28.67%. Given FTI Consulting’s higher possible upside, analysts clearly believe FTI Consulting is more favorable than The Hackett Group.

Insider and Institutional Ownership

84.4% of The Hackett Group shares are held by institutional investors. Comparatively, 96.1% of FTI Consulting shares are held by institutional investors. 19.0% of The Hackett Group shares are held by insiders. Comparatively, 1.0% of FTI Consulting shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

The Hackett Group beats FTI Consulting on 10 of the 16 factors compared between the two stocks.

About The Hackett Group

The Hackett Group, Inc. is an advisory and technology consulting company. The Company’s services include business transformation, enterprise performance management, working capital management and global business services. The Company is engaged in providing business and technology consulting services. It focuses on business strategy, operations, finance, human capital management, strategic sourcing, procurement, and information technology, including Oracle Enterprise Performance Management (EPM) and SAP practices. It offers a range of services, including executive advisory programs, benchmarking, business transformation and technology consulting services. Its advisory programs include a mix of the deliverables, such as Best Practice Intelligence Center, Best Practice Accelerators, Advisor Inquiry, Best Practice Research and Peer Interaction. Its Business Transformation programs help clients develop a coordinated strategy for achieving performance improvements across the enterprise.

About FTI Consulting

FTI Consulting, Inc. is a business advisory company. The Company operates through five segments: Corporate Finance & Restructuring, Forensic and Litigation Consulting, Economic Consulting, Technology and Strategic Communications. The Company provides advice and services, such as restructuring (including bankruptcy), capital formation and indebtedness, interim business management, performance improvements, forensic accounting and litigation matters, international arbitrations, mergers and acquisitions (M&A), antitrust and competition matters, securities litigation, electronic discovery (or e-discovery), management and retrieval of electronically stored information (ESI), reputation management and strategic communications. The Company collaborates with Chief Financial Officers (CFOs) and their finance and accounting organizations and uses engagement tools to provide transformation services, manage risk, deliver business intelligence capabilities, and prepare for and execute events.

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