Financial Contrast: Quest Resource (NASDAQ:QRHC) vs. Aaron’s (AAN)

Quest Resource (NASDAQ: QRHC) and Aaron’s (NYSE:AAN) are both business services companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, valuation, profitability, risk, analyst recommendations and institutional ownership.

Volatility and Risk

Quest Resource has a beta of 2.82, indicating that its stock price is 182% more volatile than the S&P 500. Comparatively, Aaron’s has a beta of 0.06, indicating that its stock price is 94% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Quest Resource and Aaron’s, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Quest Resource 0 0 1 0 3.00
Aaron’s 1 2 8 1 2.75

Quest Resource currently has a consensus price target of $5.00, suggesting a potential upside of 164.55%. Aaron’s has a consensus price target of $46.50, suggesting a potential upside of 5.68%. Given Quest Resource’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Quest Resource is more favorable than Aaron’s.

Valuation and Earnings

This table compares Quest Resource and Aaron’s’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Quest Resource $138.35 million 0.21 -$5.82 million ($0.38) -4.97
Aaron’s $3.38 billion 0.91 $292.53 million $2.56 17.19

Aaron’s has higher revenue and earnings than Quest Resource. Quest Resource is trading at a lower price-to-earnings ratio than Aaron’s, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Quest Resource and Aaron’s’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Quest Resource -4.34% -8.32% -5.87%
Aaron’s 8.34% 11.22% 7.02%

Dividends

Aaron’s pays an annual dividend of $0.12 per share and has a dividend yield of 0.3%. Quest Resource does not pay a dividend. Aaron’s pays out 4.7% of its earnings in the form of a dividend. Aaron’s has increased its dividend for 11 consecutive years.

Insider & Institutional Ownership

13.6% of Quest Resource shares are held by institutional investors. 50.2% of Quest Resource shares are held by insiders. Comparatively, 2.3% of Aaron’s shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Aaron’s beats Quest Resource on 12 of the 18 factors compared between the two stocks.

Quest Resource Company Profile

Quest Resource Holding Corporation, through its subsidiaries, provides management programs to reuse, recycle, and dispose various waste streams and recyclables in the United States. The company offers recycling and waste management services for motor oil, oil filters, scrap tires, grease and cooking oil, food waste, and expired food products; and various other materials, such as glass, cardboard, paper, and metal, as well as hazardous materials, plastics, construction debris, batteries, mercury, lights, regulated waste, electronic devices, and industrial cleaning products. It also provides landfill diversion services. In addition, the company operates Earth911.com, a Website that offers data, information, and articles in engaging, educating, and entertaining consumers regarding the environment, recycling, and sustainability. Further, it provides sustainability programs, including strategic planning, writing policies and procedures, LEED and green globe certification, life cycle assessment, energy modeling, building commissioning, and carbon emission reduction reporting. Quest Resource Holding Corporation serves big box, food chain, and other retailers; automotive and fleet providers; construction and demolition projects; and commercial, industrial, residential, and educational properties through direct sales force and strategic partnerships. The company was formerly known as Infinity Resources Holdings Corp. and changed its name to Quest Resource Holding Corporation in October 2013. Quest Resource Holding Corporation is based in The Colony, Texas.

Aaron’s Company Profile

Aaron's, Inc. operates as an omnichannel provider of lease-purchase solutions. It operates through three segments: Progressive Leasing, Aaron's Business, and DAMI. The company engages in the sale, lease ownership, and specialty retailing of furniture, consumer electronics, home appliances, and accessories. As of February 15, 2018, it operated approximately 1,726 company-operated and franchised stores in 47 states and Canada, as well as its e-commerce platform, Aarons.com. Aaron's, Inc. was founded in 1955 and is headquartered in Atlanta, Georgia.

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Latest News

Foxconn Launches Investigation After Reports Of Harsh Working Conditions At Its Factory Foxconn has announced that it has launched investigations into allegations of harsh working conditions at its factory. The company made the announcement after China Labor Watch, which is based in the New York, published a report that indicated Amazon’s workers were being subjected to many hours of work, inadequate training, low wages as well as over dependence on temporary workers. Undercover investigation Before compiling the report, an investigator from China Labor Watch went underground and acted as a worker in the factory. He then interviewed 20 workers, as well as took time to observe the conditions. During the period of investigation, the undercover investigator secured a position in the factory to clean Echo Dot speakers using a toothbrush soaked in rubbing alcohol to remove dust.  In its investigation, China Labor Watch said around 40% of the employees at the factory were on temporary basis. This is far beyond the 10% that is legally allowed under the Chinese law. Additionally, the investigation also found out that dispatch employees were paid at the same rate for both regular and overtime hours.  According to the investigation, the company was paying dispatch workers $2.26 per hour. Additionally, workers were working over 100 hours in over time every month during peak season. This is way beyond the 36 hours of overtime allowed under the law. Additionally, some workers worked for 14 consecutive days.   Amazon’s audit  In its response, Amazon said it carried out an audit of the factory and found that dispatch workers and overtime are matters of great concern. Amazon in a statement, said following the revelation, it requested Foxconn to put in place a corrective plan. Amazon said it is currently monitoring the response from Foxconn as well as the compliance with its Supplier Code of Conduct. Amazon expressed its commitment to ensuring that the matter is fully resolved.  Echo Speakers Amazon, which is the largest online retailer in the world, sells a variety of devices. The company uses tablets and kindles to sell more digital books.   Foxconn, which is based in Taiwan is the largest manufacturer of contract electronics in the world and has a headcount of over a million people. The company, which makes Apple iPhones made headlines following as series of suicides at its plant. The suicides were linked to poor working conditions at the plant to which the company responded with a promise to improve the working conditions.
Foxconn Launches Investigation After Reports Of Harsh Working Conditions At Its Factory Foxconn has announced that it has launched investigations into allegations of harsh working conditions at its factory. The company made the announcement after China Labor Watch, which is based in the New York, published a report that indicated Amazon’s workers were being subjected to many hours of work, inadequate training, low wages as well as over dependence on temporary workers. Undercover investigation Before compiling the report, an investigator from China Labor Watch went underground and acted as a worker in the factory. He then interviewed 20 workers, as well as took time to observe the conditions. During the period of investigation, the undercover investigator secured a position in the factory to clean Echo Dot speakers using a toothbrush soaked in rubbing alcohol to remove dust. In its investigation, China Labor Watch said around 40% of the employees at the factory were on temporary basis. This is far beyond the 10% that is legally allowed under the Chinese law. Additionally, the investigation also found out that dispatch employees were paid at the same rate for both regular and overtime hours. According to the investigation, the company was paying dispatch workers $2.26 per hour. Additionally, workers were working over 100 hours in over time every month during peak season. This is way beyond the 36 hours of overtime allowed under the law. Additionally, some workers worked for 14 consecutive days. Amazon’s audit In its response, Amazon said it carried out an audit of the factory and found that dispatch workers and overtime are matters of great concern. Amazon in a statement, said following the revelation, it requested Foxconn to put in place a corrective plan. Amazon said it is currently monitoring the response from Foxconn as well as the compliance with its Supplier Code of Conduct. Amazon expressed its commitment to ensuring that the matter is fully resolved. Echo Speakers Amazon, which is the largest online retailer in the world, sells a variety of devices. The company uses tablets and kindles to sell more digital books. Foxconn, which is based in Taiwan is the largest manufacturer of contract electronics in the world and has a headcount of over a million people. The company, which makes Apple iPhones made headlines following as series of suicides at its plant. The suicides were linked to poor working conditions at the plant to which the company responded with a promise to improve the working conditions.

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