ManpowerGroup (NYSE: MAN) and On Assignment (NYSE:ASGN) are both mid-cap business services companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, valuation, institutional ownership and earnings.

Volatility and Risk

ManpowerGroup has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500. Comparatively, On Assignment has a beta of 2.13, meaning that its share price is 113% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for ManpowerGroup and On Assignment, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ManpowerGroup 0 4 3 0 2.43
On Assignment 0 0 2 0 3.00

ManpowerGroup presently has a consensus target price of $99.00, indicating a potential downside of 7.18%. On Assignment has a consensus target price of $56.00, indicating a potential upside of 21.66%. Given On Assignment’s stronger consensus rating and higher probable upside, analysts clearly believe On Assignment is more favorable than ManpowerGroup.

Insider and Institutional Ownership

94.0% of ManpowerGroup shares are held by institutional investors. Comparatively, 93.0% of On Assignment shares are held by institutional investors. 0.9% of ManpowerGroup shares are held by insiders. Comparatively, 5.4% of On Assignment shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

ManpowerGroup pays an annual dividend of $1.86 per share and has a dividend yield of 1.7%. On Assignment does not pay a dividend. ManpowerGroup pays out 28.4% of its earnings in the form of a dividend. ManpowerGroup has raised its dividend for 6 consecutive years.

Earnings & Valuation

This table compares ManpowerGroup and On Assignment’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ManpowerGroup $19.98 billion 0.36 $853.20 million $6.55 16.28
On Assignment $2.53 billion 0.96 $263.01 million $2.04 22.56

ManpowerGroup has higher revenue and earnings than On Assignment. ManpowerGroup is trading at a lower price-to-earnings ratio than On Assignment, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares ManpowerGroup and On Assignment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ManpowerGroup 2.24% 17.90% 5.78%
On Assignment 4.32% 16.71% 8.42%

Summary

On Assignment beats ManpowerGroup on 9 of the 17 factors compared between the two stocks.

About ManpowerGroup

ManpowerGroup Inc. is a provider of workforce solutions and services. The Company’s segments include Americas, Southern Europe, Northern Europe, Asia Pacific Middle East (APME), Right Management and Corporate. The Company’s Americas segment includes operations in the United States and Other Americas. Its Southern Europe segment includes operations in France, Italy and Other Southern Europe. Its Northern Europe segment includes operations in the United Kingdom, the Nordics, Germany and the Netherlands. The Company’s APME operations provide a range of workforce solutions and services offered through Manpower, Experis and ManpowerGroup Solutions, including permanent, temporary and contract recruitment, assessment and selection, training and outsourcing. The Company’s Right Management segment provides talent and career management workforce solutions. The Company provides services under its Experis brand, particularly in the areas of information technology (IT), engineering and finance.

About On Assignment

On Assignment, Inc. is a global provider of in-demand, skilled professionals in the technology, life sciences and creative sectors. The Company matches resumes with job descriptions to match people they know into positions they understand for temporary, contract-to-hire, and direct hire assignments. It operates through two segments. The Apex segment provides technical, scientific and creative professionals for temporary, contract-to-hire and permanent placement positions and consulting services to clients across the United States. The Apex segment includes Apex Systems, Lab Support and Creative Circle. The Oxford segment provides specialized niche staffing, permanent placement and consulting services in select skill and geographic markets. The Oxford segment includes Oxford Global Resources, CyberCoders and Life Sciences Europe. The Company has a network of branch offices throughout the United States, Canada and Europe.

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