Financial Analysis: Bright Horizons Family Solutions (NYSE:BFAM) versus Willdan Group (NASDAQ:WLDN)

Willdan Group (NASDAQ:WLDN) and Bright Horizons Family Solutions (NYSE:BFAM) are both business services companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.

Insider and Institutional Ownership

72.3% of Willdan Group shares are owned by institutional investors. 5.6% of Willdan Group shares are owned by insiders. Comparatively, 1.2% of Bright Horizons Family Solutions shares are owned 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.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Willdan Group and Bright Horizons Family Solutions, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Willdan Group	0	2	2	0	2.50
Bright Horizons Family Solutions	2	4	4	0	2.20

Willdan Group currently has a consensus target price of $112.67, suggesting a potential upside of 15.08%. Bright Horizons Family Solutions has a consensus target price of $100.44, suggesting a potential upside of 63.39%. Given Bright Horizons Family Solutions’ higher possible upside, analysts plainly believe Bright Horizons Family Solutions is more favorable than Willdan Group.

Valuation & Earnings

This table compares Willdan Group and Bright Horizons Family Solutions”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Willdan Group	$681.55 million	2.17	$52.56 million	$3.71	26.39
Bright Horizons Family Solutions	$2.98 billion	1.09	$193.12 million	$3.32	18.52

Bright Horizons Family Solutions has higher revenue and earnings than Willdan Group. Bright Horizons Family Solutions is trading at a lower price-to-earnings ratio than Willdan Group, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Willdan Group has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500. Comparatively, Bright Horizons Family Solutions has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500.

Profitability

This table compares Willdan Group and Bright Horizons Family Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Willdan Group	8.24%	23.36%	13.28%
Bright Horizons Family Solutions	6.35%	18.01%	6.18%

Summary

Willdan Group beats Bright Horizons Family Solutions on 9 of the 14 factors compared between the two stocks.

About Willdan Group

Willdan Group, Inc., together with its subsidiaries, provides professional, technical, and consulting services primarily in the United States. It operates in two segments, Energy, and Engineering and Consulting. The Energy segment offers comprehensive audit and surveys, program design and implementation, master planning, demand reduction, grid optimization, benchmarking analyses, design engineering, construction management, performance contracting, installation, alternative financing, measurement and verification services, and software and data analytics, as well as energy consulting and engineering, turnkey facility and infrastructure projects, and customer support services. The Engineering and Consulting segment provides building and safety, city engineering and code enforcement, development plan review and inspection, disaster recovery, geotechnical and earthquake engineering, planning and surveying, contract staff support, program and construction management, structural engineering, transportation and traffic engineering, and water resources services. This segment also offers district administration, financial consulting, and federal compliance services. It serves public and governmental agencies, including cities, counties, redevelopment agencies, water districts, school districts, and universities; investor and municipal owned energy utilities; state and federal agencies; and commercial and industrial firms, as well as various other special districts and agencies. The company was founded in 1964 and is headquartered in Anaheim, California.

About Bright Horizons Family Solutions

Bright Horizons Family Solutions Inc. provides early education and childcare, back-up care, educational advisory, and other workplace solutions services for employers and families in the United States, Puerto Rico, the United Kingdom, the Netherlands, Australia, and India. The company operates in three segments: Full Service Center-Based Child Care, Back-Up Care, and Educational Advisory and Other Services. The Full Service Center-Based Child Care segment offers traditional center-based child care and early education, preschool, and elementary education services. The Back-Up Care segment provides center-based back-up child care, in-home child and adult/elder dependent care, school-age camps, virtual tutoring, and self-sourced reimbursed care services through child care centers, school-age campuses, and in-home caregivers, as well as the back-up care network. The Educational Advisory and Other Services segment offers tuition assistance and student loan repayment program administration, workforce education, and related educational consulting services, as well as college admissions and college financial advisory services. The company was formerly known as Bright Horizons Solutions Corp. and changed its name to Bright Horizons Family Solutions Inc. in July 2012. Bright Horizons Family Solutions Inc. was founded in 1986 and is headquartered in Newton, Massachusetts.