Critical Comparison: UL Solutions (ULS) versus Its Peers

UL Solutions (NYSE:ULS) is one of 60 public companies in the “BUSINESS SVCS” industry, but how does it contrast to its peers? We will compare UL Solutions to related businesses based on the strength of its risk, earnings, valuation, institutional ownership, profitability, analyst recommendations and dividends.

Dividends

UL Solutions pays an annual dividend of $0.52 per share and has a dividend yield of 0.7%. UL Solutions pays out 31.1% of its earnings in the form of a dividend. As a group, “BUSINESS SVCS” companies pay a dividend yield of 1.3% and pay out 43.2% of their earnings in the form of a dividend.

Profitability

This table compares UL Solutions and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
UL Solutions	11.60%	40.79%	12.99%
UL Solutions Competitors	2.14%	-161.21%	1.26%

Analyst Ratings

This is a breakdown of recent ratings and target prices for UL Solutions and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UL Solutions	0	5	3	0	2.38
UL Solutions Competitors	197	1099	1843	76	2.56

UL Solutions presently has a consensus target price of $69.43, suggesting a potential downside of 3.82%. As a group, “BUSINESS SVCS” companies have a potential upside of 11.50%. Given UL Solutions’ peers stronger consensus rating and higher probable upside, analysts plainly believe UL Solutions has less favorable growth aspects than its peers.

Volatility and Risk

UL Solutions has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500. Comparatively, UL Solutions’ peers have a beta of 4.10, suggesting that their average share price is 310% more volatile than the S&P 500.

Institutional & Insider Ownership

63.3% of shares of all “BUSINESS SVCS” companies are owned by institutional investors. 1.2% of UL Solutions shares are owned by insiders. Comparatively, 15.1% of shares of all “BUSINESS SVCS” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares UL Solutions and its peers gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
UL Solutions	$2.87 billion	$326.00 million	43.23
UL Solutions Competitors	$4.52 billion	$148.30 million	-0.17

UL Solutions’ peers have higher revenue, but lower earnings than UL Solutions. UL Solutions is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Summary

UL Solutions peers beat UL Solutions on 9 of the 15 factors compared.

UL Solutions Company Profile

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.