Acacia Research (ACTG) and Servicemaster Global (SERV) Critical Survey

Acacia Research (NASDAQ: ACTG) and Servicemaster Global (NYSE:SERV) are both business services companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, earnings, risk and dividends.

Analyst Recommendations

This is a summary of current ratings and target prices for Acacia Research and Servicemaster Global, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Acacia Research 1 0 1 0 2.00
Servicemaster Global 2 2 7 0 2.45

Acacia Research presently has a consensus target price of $6.50, suggesting a potential upside of 60.49%. Servicemaster Global has a consensus target price of $49.27, suggesting a potential downside of 8.06%. Given Acacia Research’s higher probable upside, equities analysts clearly believe Acacia Research is more favorable than Servicemaster Global.

Valuation and Earnings

This table compares Acacia Research and Servicemaster Global’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Acacia Research $152.70 million 1.34 -$54.06 million $2.40 1.69
Servicemaster Global $2.75 billion 2.64 $155.00 million $1.73 30.98

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

Risk & Volatility

Acacia Research has a beta of 1.21, indicating that its stock price is 21% more volatile than the S&P 500. Comparatively, Servicemaster Global has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.

Institutional and Insider Ownership

67.1% of Acacia Research shares are owned by institutional investors. Comparatively, 100.0% of Servicemaster Global shares are owned by institutional investors. 2.8% of Acacia Research shares are owned by company insiders. Comparatively, 1.2% of Servicemaster Global shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Acacia Research and Servicemaster Global’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Acacia Research 145.12% 50.75% 46.80%
Servicemaster Global 8.16% 40.22% 5.42%

Acacia Research Company Profile

Acacia Research Corporation, through its subsidiaries, invests in, licenses and enforces patented technologies. The Company’s operating subsidiaries partner with inventors and patent owners, applying their legal and technology expertise to patent assets to unlock the financial value in their patented inventions. The Company’s operating subsidiaries assist patent owners with the prosecution and development of their patent portfolios, the protection of their patented inventions from unauthorized use, the generation of licensing revenue from users of their patented technologies and, where necessary, with the enforcement against unauthorized users of their patented technologies through the filing of patent infringement litigation. The Company’s operating subsidiaries own or control the rights to multiple patent portfolios, which include the United States patents and certain foreign counterparts, covering technologies used in a range of industries.

Servicemaster Global Company Profile

ServiceMaster Global Holdings, Inc. is a provider of essential residential and commercial services. The Company operates through three segments: Terminix, American Home Shield and the Franchise Services Group. Its portfolio of brands includes Terminix, American Home Shield, ServiceMaster Restore, ServiceMaster Clean, Merry Maids, Furniture Medic and AmeriSpec. The Terminix segment provides termite and pest control services in the United States. The American Home Shield segment provides home warranty plans that cover the repair or replacement of components of up to 21 household systems and appliances, including electrical, plumbing, central heating and air conditioning (HVAC) systems, dishwashers and ovens/cook tops. The Franchise Services Group segment consists of the ServiceMaster Restore (disaster restoration), ServiceMaster Clean (janitorial), Merry Maids (residential cleaning), Furniture Medic (cabinet and wood furniture repair) and AmeriSpec (home inspection) businesses.

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