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.
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 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.
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|
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.
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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