Analyzing Gartner (IT) and ServiceMaster (SERV)

Gartner (NYSE: IT) and ServiceMaster (NYSE:SERV) are both business services companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, profitability, valuation and risk.

Analyst Recommendations

How to Become a New Pot Stock Millionaire

This is a breakdown of current ratings and target prices for Gartner and ServiceMaster, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gartner 0 2 6 0 2.75
ServiceMaster 0 2 9 0 2.82

Gartner currently has a consensus target price of $138.00, indicating a potential upside of 16.99%. ServiceMaster has a consensus target price of $53.10, indicating a potential upside of 2.47%. Given Gartner’s higher probable upside, research analysts plainly believe Gartner is more favorable than ServiceMaster.

Valuation and Earnings

This table compares Gartner and ServiceMaster’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Gartner $3.31 billion 3.24 $3.27 million $3.31 35.64
ServiceMaster $2.91 billion 2.41 $510.00 million $2.11 24.56

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

Profitability

This table compares Gartner and ServiceMaster’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gartner 0.10% 42.47% 4.83%
ServiceMaster 17.51% 33.21% 5.14%

Risk and Volatility

Gartner has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500. Comparatively, ServiceMaster has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500.

Institutional and Insider Ownership

96.7% of Gartner shares are owned by institutional investors. 4.3% of Gartner shares are owned by insiders. Comparatively, 0.2% of ServiceMaster shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Gartner beats ServiceMaster on 9 of the 14 factors compared between the two stocks.

Gartner Company Profile

Gartner, Inc. operates as a research and advisory company. It operates through four segments: Research, Consulting, Events, and Talent Assessment & Other. The Research segment offers objective insights and advice on the priorities of various leaders in a range of functional areas of the enterprise through research and other reports, briefings, proprietary tools, access to our analysts, peer networking services, and membership programs that enable clients to make better decisions; and practice and talent management research insights in various business functions, such as human resources, sales, legal, and finance. This segment delivers its research, primarily through a subscription-based digital media service. The Consulting segment offers customized solutions to client needs through on-site and day-to-day support, as well as proprietary tools for measuring and improving IT performance. This segment provides solutions to CIOs, IT executives, and other professionals who are responsible for IT applications, enterprise architecture, go-to-market strategies, infrastructure and operations, program and portfolio management, and sourcing and vendor relationships; consulting services to professionals; and actionable solutions for IT cost optimization, technology modernization, and IT sourcing optimization initiatives. The Events segment offers business professionals in an organization the opportunity to learn, share, and network various events. The Talent Assessment & Other segment helps organizations to assess, engage, manage, and improve talent through knowledge and skills assessments, training programs, workshops, and survey and questionnaire services. The company has operations in the United States, Canada, Europe, the Middle East, Africa, and internationally. Gartner, Inc. was founded in 1979 and is headquartered in Stamford, Connecticut.

ServiceMaster 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.

Receive News & Ratings for Gartner Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Gartner and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply