Engility Holdings (NYSE: EGL) and DLH Holdings Corp. (NASDAQ:DLHC) are both small-cap aerospace companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, risk, dividends, institutional ownership and profitabiliy.

Institutional and Insider Ownership

91.2% of Engility Holdings shares are held by institutional investors. Comparatively, 51.0% of DLH Holdings Corp. shares are held by institutional investors. 0.4% of Engility Holdings shares are held by company insiders. Comparatively, 21.6% of DLH Holdings Corp. shares are held by company 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.

Earnings and Valuation

This table compares Engility Holdings and DLH Holdings Corp.’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Engility Holdings $2.04 billion 0.53 $192.00 million ($0.03) -986.67
DLH Holdings Corp. $108.13 million 0.60 $7.68 million $0.38 15.26

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.

Volatility and Risk

Engility Holdings has a beta of 2.1, indicating that its stock price is 110% more volatile than the S&P 500. Comparatively, DLH Holdings Corp. has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500.

Profitability

This table compares Engility Holdings and DLH Holdings Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Engility Holdings -0.03% 10.19% 3.27%
DLH Holdings Corp. 4.13% 14.32% 6.82%

Analyst Ratings

This is a summary of current ratings and price targets for Engility Holdings and DLH Holdings Corp., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Engility Holdings 0 2 4 0 2.67
DLH Holdings Corp. 0 0 2 0 3.00

Engility Holdings currently has a consensus price target of $35.83, suggesting a potential upside of 21.06%. DLH Holdings Corp. has a consensus price target of $6.75, suggesting a potential upside of 16.38%. Given Engility Holdings’ higher probable upside, analysts plainly believe Engility Holdings is more favorable than DLH Holdings Corp..

Summary

DLH Holdings Corp. beats Engility Holdings on 8 of the 14 factors compared between the two stocks.

About Engility Holdings

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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