Willdan Group (NASDAQ: WLDN) and Information Services Group (NASDAQ:III) are both small-cap construction companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, dividends, earnings and analyst recommendations.

Profitability

This table compares Willdan Group and Information Services Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Willdan Group 3.90% 18.10% 8.73%
Information Services Group -2.97% -4.66% -1.21%

Institutional & Insider Ownership

66.1% of Willdan Group shares are held by institutional investors. Comparatively, 42.1% of Information Services Group shares are held by institutional investors. 13.3% of Willdan Group shares are held by insiders. Comparatively, 12.0% of Information Services Group 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.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Willdan Group and Information Services Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Willdan Group 0 0 3 0 3.00
Information Services Group 0 0 2 0 3.00

Willdan Group presently has a consensus price target of $37.67, indicating a potential upside of 54.63%. Information Services Group has a consensus price target of $6.50, indicating a potential upside of 58.15%. Given Information Services Group’s higher probable upside, analysts plainly believe Information Services Group is more favorable than Willdan Group.

Earnings and Valuation

This table compares Willdan Group and Information Services Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Willdan Group $208.94 million 1.02 $8.29 million $1.15 21.18
Information Services Group $216.50 million 0.82 -$6.50 million ($0.21) -19.57

Willdan Group has higher earnings, but lower revenue than Information Services Group. Information Services Group is trading at a lower price-to-earnings ratio than Willdan Group, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Willdan Group has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500. Comparatively, Information Services Group has a beta of 0.37, suggesting that its share price is 63% less volatile than the S&P 500.

Summary

Willdan Group beats Information Services Group on 10 of the 12 factors compared between the two stocks.

About Willdan Group

Willdan Group, Inc. is a holding company. The Company provides professional technical and consulting services to utilities, private industry and public agencies at all levels of government, primarily in California and New York. It operates through four segments: Energy Efficiency Services, Engineering Services, Public Finance Services and Homeland Security Services. The Energy Efficiency Services segment provides energy efficiency consulting services to utilities, state agencies, municipalities, private industry and non-profit organizations. The Engineering Services segment offers a range of engineering and planning services to its public and private sector clients. The Public Finance Services segment provides support for the various financing techniques employed by public agencies to finance their operations and infrastructure. The Homeland Security Services segment provides national preparedness, homeland security consulting, public safety and emergency response services.

About Information Services Group

Information Services Group, Inc. is a technology insights, market intelligence and advisory services company. The Company operates in the segment of fact-based sourcing advisory services. It supports private and public sector organizations to transform and optimize their operational environments through research, benchmarking, consulting and managed services with a focus on information technology, business process transformation, program management services and enterprise resource planning. It offers service lines, including research, consulting, managed services, network carrier services, robotic process automation (RPA), outsourcing advisory and provider services. It specializes in digital transformation services, including automation, cloud and data analytics; managed governance and risk services; network carrier services; technology strategy and operations design; change management, and technology research and analysis.

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