CBIZ (CBZ) & The Advisory Board (ABCO) Critical Analysis

The Advisory Board (NASDAQ: ABCO) and CBIZ (NYSE:CBZ) are both industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, dividends, risk, profitability, analyst recommendations and institutional ownership.

Volatility & Risk

The Advisory Board has a beta of 1.34, meaning that its stock price is 34% more volatile than the S&P 500. Comparatively, CBIZ has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500.

Valuation & Earnings

This table compares The Advisory Board and CBIZ’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
The Advisory Board $803.42 million 2.73 $91.23 million $1.74 30.94
CBIZ $799.83 million 1.10 $40.06 million $0.82 19.57

The Advisory Board has higher revenue and earnings than CBIZ. CBIZ is trading at a lower price-to-earnings ratio than The Advisory Board, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

95.5% of The Advisory Board shares are held by institutional investors. Comparatively, 84.1% of CBIZ shares are held by institutional investors. 4.7% of The Advisory Board shares are held by company insiders. Comparatively, 6.9% of CBIZ shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for The Advisory Board and CBIZ, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Advisory Board 0 11 3 0 2.21
CBIZ 0 0 0 0 N/A

The Advisory Board presently has a consensus target price of $51.44, indicating a potential downside of 4.44%. Given The Advisory Board’s higher probable upside, analysts plainly believe The Advisory Board is more favorable than CBIZ.

Profitability

This table compares The Advisory Board and CBIZ’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Advisory Board -3.42% 0.48% -1.23%
CBIZ 5.34% 8.94% 4.05%

Summary

The Advisory Board beats CBIZ on 9 of the 13 factors compared between the two stocks.

The Advisory Board Company Profile

The Advisory Board Company is a provider of software and solutions to the healthcare and higher education industries. The Company offers subscription-based membership programs, software and data-enabled services. All of its programs are rooted in best practices and extends across four areas, including Best practices research, Technology, Data-enabled services and Consulting services. The best practices research and insight programs provide the foundation for all of its other programs. The Company offers technology analytics programs anchored by cloud-based software applications that surface performance improvement opportunities to accelerate progress. Through its consulting services, the Company provides on-the-ground support for performance improvement initiatives, as well as best practice professional management of areas of the hospital or medical group. The Company’s data-enabled services are primarily focused in the area of enrollment management.

CBIZ Company Profile

CBIZ, Inc. (CBIZ) is engaged in the professional services business. The Company operates its professional services business through acquiring and integrating accounting and financial service providers, group health benefits consulting firms, property and casualty brokerage firms, payroll service providers, and valuation and other service firms throughout the United States. Its segments include Financial Services, Benefits and Insurance Services, National Practices, and Corporate and Other. The Financial Services group includes accounting and tax, government healthcare consulting, financial advisory, valuation, and risk and advisory services. The Benefits and Insurance Services group includes group health benefits consulting, payroll, property and casualty, and retirement plan services. The National Practices segment includes managed networking and hardware services, and healthcare consulting.

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