Financial Analysis: Research Solutions (NASDAQ:RSSS) and Willdan Group (NASDAQ:WLDN)

Willdan Group (NASDAQ:WLDN) and Research Solutions (NASDAQ:RSSS) are both small-cap industrials companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Willdan Group	0	2	2	0	2.50
Research Solutions	0	2	3	0	2.60

Willdan Group currently has a consensus target price of $112.67, indicating a potential upside of 64.40%. Research Solutions has a consensus target price of $3.83, indicating a potential upside of 74.24%. Given Research Solutions’ stronger consensus rating and higher probable upside, analysts clearly believe Research Solutions is more favorable than Willdan Group.

Volatility and Risk

Willdan Group has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500. Comparatively, Research Solutions has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500.

Profitability

This table compares Willdan Group and Research 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%
Research Solutions	9.28%	27.45%	9.94%

Institutional and Insider Ownership

72.3% of Willdan Group shares are held by institutional investors. Comparatively, 33.6% of Research Solutions shares are held by institutional investors. 5.6% of Willdan Group shares are held by company insiders. Comparatively, 10.9% of Research Solutions shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Willdan Group and Research Solutions”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Willdan Group	$681.55 million	1.52	$52.56 million	$3.71	18.47
Research Solutions	$49.06 million	1.50	$1.27 million	$0.14	15.71

Willdan Group has higher revenue and earnings than Research Solutions. Research 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.

Summary

Willdan Group beats Research Solutions on 8 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 Research Solutions

Research Solutions, Inc., through its subsidiaries, provides research cloud-based software-as-a-service software platform and related services to corporate, academic, government and individual researchers in the United States, Europe, and internationally. It provides Discover platform that facilitates search discovery across virtually all scientific, technical, and medical (STM) articles available, including free basic search solutions and advanced search tools, which include the Resolute.ai and scite.ai products, a tools that allows for searching and identifying relevant research and find insights in other datasets adjacent to STM content, such as clinical trial, patent, life science and medtech regulatory information, competitor and technology landscape insights in addition to searching the customer’s internal datasets. The company also offers Article Galaxy, a solution that allows research organizations to load their entitlements, consisting of subscriptions, discount or token packages, and their existing library of articles. In addition, it provides Manage platform, a references solution that allows users to access the article inside the platform including setting up personal folders or team folders and allows researchers to markup and take notes on the articles in a supported browser on a desktop or tablet. Further, the company’s platform facilitates the sale of published STM content sold as individual articles. The company was formerly known as Derycz Scientific, Inc. and changed its name to Research Solutions, Inc. in March 2013. Research Solutions, Inc. was incorporated in 2006 and is based in Henderson, Nevada.