CBIZ (CBZ) versus ServiceMaster Global Holdings (SERV) Critical Review

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

Institutional & Insider Ownership

85.6% of CBIZ shares are owned by institutional investors. 6.9% of CBIZ shares are owned by company insiders. Comparatively, 1.2% of ServiceMaster Global Holdings shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares CBIZ and ServiceMaster Global Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CBIZ 5.54% 9.42% 4.22%
ServiceMaster Global Holdings 7.92% 40.74% 5.17%

Valuation and Earnings

This table compares CBIZ and ServiceMaster Global Holdings’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CBIZ $831.05 million 0.99 $91.52 million $0.83 18.25
ServiceMaster Global Holdings $2.84 billion 2.19 $665.00 million $1.66 28.12

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

Risk & Volatility

CBIZ has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, ServiceMaster Global Holdings has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for CBIZ and ServiceMaster Global Holdings, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CBIZ 0 0 0 0 N/A
ServiceMaster Global Holdings 2 1 5 0 2.38

ServiceMaster Global Holdings has a consensus price target of $44.50, suggesting a potential downside of 4.67%. Given ServiceMaster Global Holdings’ higher possible upside, analysts clearly believe ServiceMaster Global Holdings is more favorable than CBIZ.

Summary

ServiceMaster Global Holdings beats CBIZ on 11 of the 13 factors compared between the two stocks.

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.

ServiceMaster Global Holdings 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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