Contrasting Unifirst (NYSE:UNF) & Vestis (NYSE:VSTS)

Vestis (NYSE:VSTS) and Unifirst (NYSE:UNF) are both industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, risk, institutional ownership, valuation, analyst recommendations and dividends.

Dividends

Vestis pays an annual dividend of $0.14 per share and has a dividend yield of 2.4%. Unifirst pays an annual dividend of $1.40 per share and has a dividend yield of 0.8%. Vestis pays out -77.8% of its earnings in the form of a dividend. Unifirst pays out 17.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Unifirst has increased its dividend for 7 consecutive years. Vestis is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Vestis has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500. Comparatively, Unifirst has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500.

Profitability

This table compares Vestis and Unifirst’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vestis	-0.89%	5.36%	1.62%
Unifirst	6.13%	7.46%	5.86%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Vestis and Unifirst, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vestis	1	4	0	0	1.80
Unifirst	2	2	0	0	1.50

Vestis presently has a consensus target price of $11.75, suggesting a potential upside of 98.01%. Unifirst has a consensus target price of $180.00, suggesting a potential downside of 3.47%. Given Vestis’ stronger consensus rating and higher probable upside, research analysts plainly believe Vestis is more favorable than Unifirst.

Insider & Institutional Ownership

97.4% of Vestis shares are owned by institutional investors. Comparatively, 78.2% of Unifirst shares are owned by institutional investors. 13.6% of Vestis shares are owned by company insiders. Comparatively, 0.9% of Unifirst shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Vestis and Unifirst”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vestis	$2.81 billion	0.28	$20.97 million	($0.18)	-32.97
Unifirst	$2.45 billion	1.41	$145.47 million	$8.04	23.19

Unifirst has lower revenue, but higher earnings than Vestis. Vestis is trading at a lower price-to-earnings ratio than Unifirst, indicating that it is currently the more affordable of the two stocks.

About Vestis

Vestis Corporation provides uniform rentals and workplace supplies in the United States and Canada. Its products include uniform options, such as shirts, pants, outerwear, gowns, scrubs, high visibility garments, particulate-free garments, and flame-resistant garments, as well as shoes and accessories; and workplace supplies, including managed restroom supply services, first-aid supplies and safety products, floor mats, towels, and linens. The company serves manufacturing, hospitality, retail, food processing, food service, pharmaceuticals, healthcare, automotive, and cleanroom industries. Vestis Corporation was founded in 1936 and is headquartered in Roswell, Georgia.

About Unifirst

UniFirst Corporation provides workplace uniforms and protective work wear clothing in the United States, Europe, and Canada. The company operates through U.S. and Canadian Rental and Cleaning, Manufacturing, Specialty Garments Rental and Cleaning, and First Aid segments. It designs, manufactures, personalizes, rents, cleans, delivers, and sells a range of uniforms and protective clothing, including shirts, pants, jackets, coveralls, lab coats, smocks, and aprons; and specialized protective wear, such as flame resistant and high visibility garments. The company also rents and sells industrial wiping products, floor mats, facility service products, and dry and wet mops; restroom and cleaning supplies comprising air fresheners, paper products, gloves, masks, sanitizers, and hand soaps; and other textile products. In addition, it provides first aid cabinet services and other safety supplies; decontaminates and cleans work clothes, and other items that is exposed to radioactive materials; and services special cleanroom protective wear and facilities. Further, it offers a range of garment service options, including full-service rental programs in which garments are cleaned and serviced; lease programs in which garments are cleaned and maintained by individual employees; and purchase programs to buy garments and related items directly. The company serves automobile service centers and dealers, delivery services, food and general merchandise retailers, food processors and service operations, light manufacturers, maintenance facilities, restaurants, service companies, soft and durable goods wholesalers, transportation companies, healthcare providers, government agencies, research and development laboratories, high technology companies, and utilities operating nuclear reactors, as well as others who require employee clothing for image, identification, protection, or utility purposes. UniFirst Corporation was founded in 1936 and is headquartered in Wilmington, Massachusetts.