Analyzing Paychex (NASDAQ:PAYX) and Mistras Group (NYSE:MG)

Paychex (NASDAQ:PAYX) and Mistras Group (NYSE:MG) are both industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, earnings, risk, valuation, profitability and analyst recommendations.

Insider & Institutional Ownership

83.5% of Paychex shares are owned by institutional investors. Comparatively, 74.9% of Mistras Group shares are owned by institutional investors. 0.6% of Paychex shares are owned by company insiders. Comparatively, 7.1% of Mistras Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Paychex and Mistras Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Paychex	$6.60 billion	6.29	$1.76 billion	$5.04	23.17
Mistras Group	$748.24 million	0.86	$16.84 million	$0.63	32.10

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

Risk & Volatility

Paychex has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500. Comparatively, Mistras Group has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.

Profitability

This table compares Paychex and Mistras Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Paychex	27.35%	52.78%	12.29%
Mistras Group	2.78%	13.01%	5.34%

Analyst Recommendations

This is a breakdown of current ratings for Paychex and Mistras Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Paychex	2	13	1	1	2.06
Mistras Group	0	2	1	0	2.33

Paychex currently has a consensus target price of $115.93, indicating a potential downside of 0.70%. Mistras Group has a consensus target price of $18.18, indicating a potential downside of 10.11%. Given Paychex’s higher possible upside, equities research analysts clearly believe Paychex is more favorable than Mistras Group.

Summary

Paychex beats Mistras Group on 10 of the 14 factors compared between the two stocks.

About Paychex

Paychex, Inc. provides payroll, human resources and employee benefits solutions to businesses of varying sizes. Its services include payroll processing, tax administration, time and attendance tools, HR support, employee benefits, retirement services and business insurance. The company also offers professional employer organization services, which let businesses outsource certain employment responsibilities, as well as technology for workforce management, recruiting and compliance. Paychex primarily serves employers in the United States and supports businesses with international workforce needs.

About Mistras Group

Mistras Group provides asset protection and integrity services to companies that operate industrial facilities and infrastructure. Its work includes nondestructive testing and inspection, engineering and consulting, and monitoring systems designed to help customers assess asset condition, identify potential problems and support safe, reliable operations. The company serves industries including energy, aerospace, manufacturing and infrastructure. Its services and technologies are used to inspect and monitor assets such as pipelines, power-generation facilities, aircraft and bridges.