WageWorks (NYSE: WAGE) and Lifelock (NYSE:LOCK) are both mid-cap industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, analyst recommendations, institutional ownership, dividends, valuation and profitability.

Insider & Institutional Ownership

88.8% of Lifelock shares are held by institutional investors. 3.5% of WageWorks shares are held by company insiders. Comparatively, 13.9% of Lifelock 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 WageWorks and Lifelock’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
WageWorks $364.71 million 6.97 $20.20 million $1.17 54.83
Lifelock N/A N/A N/A $0.19 126.26

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

Profitability

This table compares WageWorks and Lifelock’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
WageWorks 9.87% 9.60% 3.37%
Lifelock 8.46% 24.53% 10.96%

Analyst Recommendations

This is a summary of current recommendations for WageWorks and Lifelock, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
WageWorks 0 1 4 0 2.80
Lifelock 0 0 0 0 N/A

WageWorks presently has a consensus price target of $83.00, indicating a potential upside of 29.38%. Given WageWorks’ higher probable upside, analysts clearly believe WageWorks is more favorable than Lifelock.

Summary

WageWorks beats Lifelock on 5 of the 9 factors compared between the two stocks.

About WageWorks

WageWorks, Inc. is engaged in administering Consumer-Directed Benefits (CDBs). The Company administers CBDs, including pre-tax spending accounts, such as Health Savings Accounts (HSAs), health and dependent care Flexible Spending Accounts (FSAs), and Health Reimbursement Arrangements (HRAs), as well as Commuter Benefit Services, including transit and parking programs, wellness programs, Consolidated Omnibus Budget Reconciliation Act (COBRA) and other employee benefits. Its CDB programs assist employees and their families in saving money by using pre-tax dollars to pay for certain of their healthcare, dependent care and commuter expenses. Employers financially benefit from its programs through reduced payroll taxes. It provides operational support services to its clients and its cross-functional teams, including customer support and claims processing. It administers HSAs for employers that allow employee participants to invest funds to be used for qualified healthcare expenses.

About Lifelock

LifeLock, Inc. provides proactive identity theft protection services for consumers and consumer risk management services for enterprises. The Company monitors certain identity-related events, such as new account openings and credit-related applications. It operates in two segments: consumer segment and an enterprise segment. The Company’s LifeLock ecosystem combines data repositories of personally identifiable information and consumer transactions, predictive analytics and a technology platform. It applies predictive analytics to the data in its repositories to provide its members and enterprise customers’ actionable intelligence that helps protect against identity theft and identity fraud. It offers its consumer services on a monthly or annual subscription basis. It provides consumer risk management services, including delivering its on-demand identity risk, identity-authentication and credit information about consumers to its enterprise customers in the daily transaction flows.

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