H&E Equipment Services (NASDAQ: HEES) and Mistras Group (NYSE:MG) are both small-cap industrial products companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, dividends, analyst recommendations, institutional ownership, valuation, risk and earnings.
Risk & Volatility
H&E Equipment Services has a beta of 2.55, indicating that its share price is 155% more volatile than the S&P 500. Comparatively, Mistras Group has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500.
Profitability
This table compares H&E Equipment Services and Mistras Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| H&E Equipment Services | 4.08% | 27.93% | 3.09% |
| Mistras Group | 2.69% | 7.04% | 4.06% |
Institutional and Insider Ownership
77.9% of H&E Equipment Services shares are owned by institutional investors. Comparatively, 57.2% of Mistras Group shares are owned by institutional investors. 12.3% of H&E Equipment Services shares are owned by insiders. Comparatively, 44.7% of Mistras Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares H&E Equipment Services and Mistras Group’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| H&E Equipment Services | $965.22 million | 0.75 | $137.07 million | $1.11 | 18.50 |
| Mistras Group | $680.81 million | 0.72 | $53.46 million | $0.61 | 28.64 |
H&E Equipment Services has higher revenue and earnings than Mistras Group. H&E Equipment Services is trading at a lower price-to-earnings ratio than Mistras Group, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of recent recommendations for H&E Equipment Services and Mistras Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| H&E Equipment Services | 0 | 0 | 1 | 0 | 3.00 |
| Mistras Group | 0 | 3 | 2 | 0 | 2.40 |
H&E Equipment Services currently has a consensus target price of $30.00, suggesting a potential upside of 46.13%. Mistras Group has a consensus target price of $34.40, suggesting a potential upside of 96.91%. Given Mistras Group’s higher possible upside, analysts plainly believe Mistras Group is more favorable than H&E Equipment Services.
Dividends
H&E Equipment Services pays an annual dividend of $1.10 per share and has a dividend yield of 5.4%. Mistras Group does not pay a dividend. H&E Equipment Services pays out 99.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Summary
H&E Equipment Services beats Mistras Group on 10 of the 16 factors compared between the two stocks.
H&E Equipment Services Company Profile
H&E Equipment Services, Inc. is an integrated equipment services company. The Company is focused on heavy construction and industrial equipment. As of December 31, 2016, the Company rented, sold and provided parts and services support for four core categories of specialized equipment: hi-lift or aerial work platform equipment; cranes; earthmoving equipment, and industrial lift trucks. The Company’s principal business activities include equipment rentals; new equipment sales; used equipment sales; parts sales, and repair and maintenance services. As of February 16, 2017, the Company had 78 facilities located throughout the West Coast, Intermountain, Southwest, Gulf Coast, Southeast and Mid-Atlantic regions of the United States. The Company rents its heavy construction and industrial equipment to its customers on a daily, weekly and monthly basis. The Company sells new heavy construction and industrial equipment. The Company is a distributor of Grove and Manitowoc crane equipment.
Mistras Group Company Profile
Mistras Group, Inc. offers asset protection solutions and is a provider of technology-enabled asset protection solutions used to evaluate the structural integrity and reliability of critical energy, industrial and public infrastructure. The Company’s segments are Services segment, which provides asset protection solutions in North America with concentration on the United States along with a Canadian services business, consisting of non-destructive testing, and inspection and engineering services that are used to evaluate structural integrity and reliability of critical energy, industrial and public infrastructure; International segment, which offers services, products and systems similar to those of its Services and Products and Systems segments to markets in Europe, the Middle East, Africa, Asia and South America, and Products and Systems segment, which designs, manufactures, sells, installs and services asset protection products and systems, including equipment and instrumentation.
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