Pharma Bio Serv (OTCMKTS:PBSV) & Exponent (OTCMKTS:EXPO) Financial Analysis

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Pharma Bio Serv (OTCMKTS:PBSV) and Exponent (NASDAQ:EXPO) are both business services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, profitability, risk, earnings, valuation and institutional ownership.

Risk & Volatility

Pharma Bio Serv has a beta of 0.2, suggesting that its share price is 80% less volatile than the S&P 500. Comparatively, Exponent has a beta of 0.44, suggesting that its share price is 56% less volatile than the S&P 500.

Valuation & Earnings

This table compares Pharma Bio Serv and Exponent’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pharma Bio Serv $17.80 million 1.24 $1.27 million ($0.05) -18.80
Exponent $379.52 million 8.23 $72.25 million $1.25 48.12

Exponent has higher revenue and earnings than Pharma Bio Serv. Pharma Bio Serv is trading at a lower price-to-earnings ratio than Exponent, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

88.8% of Exponent shares are owned by institutional investors. 51.2% of Pharma Bio Serv shares are owned by insiders. Comparatively, 2.3% of Exponent shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Pharma Bio Serv pays an annual dividend of $0.08 per share and has a dividend yield of 8.5%. Exponent pays an annual dividend of $0.64 per share and has a dividend yield of 1.1%. Pharma Bio Serv pays out -160.0% of its earnings in the form of a dividend. Exponent pays out 51.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Exponent has raised its dividend for 5 consecutive years. Pharma Bio Serv is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Pharma Bio Serv and Exponent, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pharma Bio Serv 0 0 0 0 N/A
Exponent 0 1 3 0 2.75

Exponent has a consensus price target of $60.00, indicating a potential downside of 0.25%. Given Exponent’s higher probable upside, analysts plainly believe Exponent is more favorable than Pharma Bio Serv.

Profitability

This table compares Pharma Bio Serv and Exponent’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pharma Bio Serv 26.19% 11.85% 9.64%
Exponent 19.53% 23.10% 15.75%

Summary

Exponent beats Pharma Bio Serv on 12 of the 16 factors compared between the two stocks.

Pharma Bio Serv Company Profile

Pharma-Bio Serv, Inc. operates as a compliance and technology transfer services consulting firm the United States, Europe, and Brazil markets. It provides compliance consulting services to the pharmaceutical, chemical, biotechnology, medical device, cosmetic, food industries, and allied products in Puerto Rico, the United States, Europe, and Brazil. The company's technical consulting services comprise regulatory compliance, validation, technology transfer, engineering, project management, and process support. Pharma-Bio Serv, Inc. was founded in 1993 and is headquartered in Dorado, Puerto Rico.

Exponent Company Profile

Exponent, Inc., together with its subsidiaries, operates as a science and engineering consulting company worldwide. Its services include analysis of product development, product recall, regulatory compliance, and the discovery of potential problems related to products, people, property, and impending litigation. The company operates in two segments, Engineering and Other Scientific, and Environmental and Health. The Engineering and Other Scientific segment provides services in the areas of biomechanics, biomedical engineering, buildings and structures, civil engineering, construction consulting, electrical engineering and computer science, human factors, industrial structures, materials and corrosion engineering, mechanical engineering, polymer science and materials chemistry, statistical and data sciences, thermal sciences, and vehicle analysis. The Environmental and Health segment offers services in the areas of chemical regulation and food safety, ecological and biological sciences, environmental and earth sciences, and health sciences. The company offers approximately 90 different technical disciplines to solve complicated issues facing industry and government. It serves clients in chemical, construction, consumer products, energy, food, beverage and nutrition, government, life sciences, insurance, manufacturing, technology, industrial equipment, transportation, and other sectors of the economy. The company was formerly known as The Failure Group, Inc. and changed its name to Exponent, Inc. in 1998. Exponent, Inc. was founded in 1967 and is headquartered in Menlo Park, California.

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