SGS (OTCMKTS:SGSOY) and APi Group (NYSE:APG) Financial Analysis

APi Group (NYSE:APG) and SGS (OTCMKTS:SGSOY) are both large-cap business services companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, risk, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares APi Group and SGS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
APi Group	3.70%	37.92%	14.19%
SGS	N/A	N/A	N/A

Analyst Ratings

This is a summary of recent ratings and price targets for APi Group and SGS, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
APi Group	0	2	7	1	2.90
SGS	1	2	1	3	2.86

APi Group presently has a consensus target price of $48.57, suggesting a potential upside of 18.29%. Given APi Group’s stronger consensus rating and higher possible upside, equities analysts clearly believe APi Group is more favorable than SGS.

Insider and Institutional Ownership

86.6% of APi Group shares are held by institutional investors. 17.0% of APi Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares APi Group and SGS”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
APi Group	$7.91 billion	2.24	$302.00 million	($0.76)	-54.03
SGS	$8.38 billion	2.47	$806.28 million	N/A	N/A

SGS has higher revenue and earnings than APi Group.

Risk & Volatility

APi Group has a beta of 1.69, indicating that its share price is 69% more volatile than the S&P 500. Comparatively, SGS has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500.

Summary

APi Group beats SGS on 9 of the 13 factors compared between the two stocks.

About APi Group

APi Group Corporation provides safety and specialty services worldwide. It operates through Safety Services and Specialty Services segments. The Safety Services segment offers solutions focusing on end-to-end integrated occupancy systems, such as fire protection services; heating, ventilation, and air conditioning solutions; and entry systems, which include the design, installation, inspection, and service of these integrated systems. The Specialty Services segment provides various infrastructure and specialized industrial plant services, including maintenance and repair of underground electric, gas, water, sewer, and telecommunications infrastructure. This segment offers engineering and design, fabrication, installation, maintenance service and repair, retrofitting and upgrading services, pipeline infrastructure, access and road construction, supporting facilities, and integrity management and maintenance to the energy industry. It serves customers in the public and private sectors, including commercial, industrial, distribution and fulfillment centers, manufacturing, education, healthcare, telecom, utilities, transmission and integrity, high tech, entertainment, government, and infrastructure markets. The company was formerly known as J2 Acquisition Limited and changed its name to APi Group Corporation in October 2019. APi Group Corporation was founded in 1926 and is headquartered in New Brighton, Minnesota.

About SGS

SGS SA provides inspection, testing, and verification services in Europe, Africa, the Middle East, the Americas, and the Asia Pacific. It operates in five segments: Connectivity & Products, Health & Nutrition, Industries & Environment, Natural Resources, and Business Assurance. The company provides laboratory testing, product inspection and consulting, process assessment, technical and transactional assistance; and automotive, connectivity, softlines and accessories, and hardgoods, toys, and juvenile products, as well as government and trade facilitation services. In addition, it offers a range of testing, inspection and certification solutions for the crop science, food, health science, and cosmetics and hygiene industries; field services, technical assessment, and advisory services; and services related to industrial, public health and safety, environmental testing, and public mandates. Further, it provides assessment, auditing, and certification, supply chain assurance, training, consulting, and sustainability assurance services; agricultural commodities, geochemistry, laboratory testing petroleum and chemicals, metallurgy and consulting, mineral and metal commodities, and oil, gas, and chemical commodities; and sustainability solutions. The company serves the agriculture and food, chemical, construction, consumer and retail, energy, industrial manufacturing, life sciences, mining, oil and gas, public, and transportation sectors. SGS SA was founded in 1878 and is headquartered in Geneva, Switzerland.