Alliance Data Systems (NYSE:ADS) & DHI Group (NYSE:DHX) Head to Head Analysis

Alliance Data Systems (NYSE:ADS) and DHI Group (NYSE:DHX) are both business services companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, risk, dividends, earnings and valuation.

Volatility and Risk

Alliance Data Systems has a beta of 1.67, suggesting that its share price is 67% more volatile than the S&P 500. Comparatively, DHI Group has a beta of 1.49, suggesting that its share price is 49% more volatile than the S&P 500.

Valuation & Earnings

This table compares Alliance Data Systems and DHI Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Alliance Data Systems $7.79 billion 0.67 $963.10 million $21.56 5.24
DHI Group $161.57 million 1.01 $7.17 million $0.15 20.20

Alliance Data Systems has higher revenue and earnings than DHI Group. Alliance Data Systems is trading at a lower price-to-earnings ratio than DHI Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Alliance Data Systems and DHI Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alliance Data Systems 7.54% 47.40% 3.41%
DHI Group 8.00% 8.00% 4.52%

Analyst Recommendations

This is a summary of recent ratings and target prices for Alliance Data Systems and DHI Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alliance Data Systems 1 9 8 0 2.39
DHI Group 0 0 1 0 3.00

Alliance Data Systems presently has a consensus target price of $142.64, suggesting a potential upside of 26.33%. DHI Group has a consensus target price of $3.50, suggesting a potential upside of 15.51%. Given Alliance Data Systems’ higher probable upside, analysts plainly believe Alliance Data Systems is more favorable than DHI Group.

Institutional and Insider Ownership

90.0% of Alliance Data Systems shares are owned by institutional investors. Comparatively, 78.0% of DHI Group shares are owned by institutional investors. 2.8% of Alliance Data Systems shares are owned by company insiders. Comparatively, 8.1% of DHI Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Alliance Data Systems beats DHI Group on 9 of the 14 factors compared between the two stocks.

About Alliance Data Systems

Alliance Data Systems Corporation provides data-driven marketing and loyalty solutions worldwide. It operates through three segments: LoyaltyOne, Epsilon, and Card Services. The company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. It also focuses on facilitating and managing interactions between its clients and their customers through various consumer marketing channels, including in-store, online, email, social media, mobile, direct mail, and telephone. The company captures and analyzes data created during each customer interaction, leveraging the insight derived from that data to enable clients to identify and acquire new customers and to enhance customer loyalty. It serves clients across various end-markets, including financial services, specialty retail, grocery and drugstore chains, petroleum retail, automotive, hospitality and travel, telecommunications, insurance, and healthcare. Alliance Data Systems Corporation was founded in 1996 and is headquartered in Plano, Texas.

About DHI Group

DHI Group, Inc. provides data, insights, and employment connections through specialized services for technology professionals in the United States and internationally. The company operates Dice that offers job postings of technology and non-technology companies for industries, such as positions for software engineers, big data professionals, systems administrators, database specialists, project managers, and other technology and engineering professionals; and ClearanceJobs, an Internet-based career network, which matches security-cleared professionals with hiring companies searching for employees. It also provides eFinancialCareers, a financial services careers Website for financial services industry professionals from various sectors, including asset management, risk management, investment banking, and information technology; Rigzone, a Website that delivers online content, data, and career services in the oil and gas industry; and BioSpace, a resource for biotechnology careers, news, and resources in the area of life sciences. Further, it operates Targeted Job Fairs for technology, energy, and security-cleared professionals. The company serves small, mid-sized, and large direct employers; staffing companies; recruiting agencies; consulting firms; and marketing departments of companies. The company was formerly known as Dice Holdings, Inc. and changed its name to DHI Group, Inc. in April 2015. DHI Group, Inc. was founded in 1991 and is headquartered in New York, New York.

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