Critical Comparison: Acacia Research (NASDAQ:ACTG) versus UL Solutions (NYSE:ULS)

UL Solutions (NYSE:ULS) and Acacia Research (NASDAQ:ACTG) are both business services companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, valuation, profitability, earnings and institutional ownership.

Analyst Recommendations

This is a summary of recent ratings for UL Solutions and Acacia Research, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UL Solutions	0	4	4	1	2.67
Acacia Research	1	0	0	0	1.00

UL Solutions presently has a consensus price target of $85.14, indicating a potential upside of 8.21%. Given UL Solutions’ stronger consensus rating and higher possible upside, research analysts plainly believe UL Solutions is more favorable than Acacia Research.

Institutional & Insider Ownership

86.7% of Acacia Research shares are held by institutional investors. 1.2% of UL Solutions shares are held by insiders. Comparatively, 1.1% of Acacia Research shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares UL Solutions and Acacia Research”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UL Solutions	$2.87 billion	5.51	$326.00 million	$1.67	47.11
Acacia Research	$122.31 million	2.99	-$36.06 million	$0.05	75.90

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

Volatility and Risk

UL Solutions has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500. Comparatively, Acacia Research has a beta of 0.49, meaning that its stock price is 51% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
UL Solutions	11.29%	34.49%	12.74%
Acacia Research	1.70%	2.45%	1.80%

Summary

UL Solutions beats Acacia Research on 13 of the 15 factors compared between the two stocks.

About UL Solutions

UL Solutions Inc. provides safety science services worldwide. It operates through three segments: Industrial, Consumer, and Software and Advisory. The Industrial segment provides testing, inspection, and certification services across various end markets, including energy, industrial automation, engineered materials, and built environment, as well as stakeholders, such as manufacturers, building owners, end users, and regulators. The Consumer segment offers safety certification testing, ongoing certification, global market access, testing for connectivity, performance and quality, and critical systems advisory and training services, as well as product market acceptance and risk mitigation services for customers in the consumer products end markets comprising consumer electronics, medical devices, information technologies, appliances, HVAC, lighting, and retail, as well as consumer applications, such as new mobility, smart products, and 5G. The Software and Advisory segment provide software and technical advisory services that enable customers to manage regulatory requirements, deliver supply chain transparency, and operationalize sustainability for regulated industries, including life sciences, supply chain regulations, transparency needs, and new ESG and sustainability requirements. It offers ULTRUS software brand to help customers improve speed to market, sustainability and safety. UL Solutions Inc. was formerly known as UL Inc. and changed its name to UL Solutions Inc. in June 2022. The company was founded in 1894 and is headquartered in Northbrook, Illinois with additional offices in North America, Asia Pacific, Africa, Europe, Latin America, and Middle East. UL Solutions Inc. operates as a subsidiary of ULSE Inc.

About Acacia Research

Acacia is a publicly traded (Nasdaq: ACTG) company that is focused on acquiring and operating businesses across the industrial, energy and technology sectors where it believes it can leverage its expertise, significant capital base, and deep industry relationships to drive value. Acacia evaluates opportunities based on the attractiveness of the underlying cash flows, without regard to a specific investment horizon. Acacia operates its businesses based on three key principles of people, process, and performance and has built a management team with demonstrated expertise in research, transactions and execution, and operations and management.