Aramark (NYSE:ARMK) versus CorVel (NASDAQ:CRVL) Critical Review

Aramark (NYSE:ARMK) and CorVel (NASDAQ:CRVL) are both business services companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, earnings, profitability, valuation and dividends.

Risk and Volatility

Aramark has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500. Comparatively, CorVel has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500.

Profitability

This table compares Aramark and CorVel’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aramark	1.84%	17.05%	4.02%
CorVel	11.51%	29.92%	17.68%

Earnings and Valuation

This table compares Aramark and CorVel”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aramark	$19.41 billion	0.76	$326.39 million	$1.34	41.86
CorVel	$958.53 million	3.33	$110.34 million	$2.14	29.43

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

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Aramark and CorVel, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aramark	0	2	11	0	2.85
CorVel	1	0	0	0	1.00

Aramark presently has a consensus price target of $56.96, suggesting a potential upside of 1.55%. Given Aramark’s stronger consensus rating and higher probable upside, equities analysts clearly believe Aramark is more favorable than CorVel.

Institutional & Insider Ownership

51.4% of CorVel shares are held by institutional investors. 2.8% of Aramark shares are held by insiders. Comparatively, 44.6% of CorVel shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

About Aramark

Aramark provides food and facilities services to education, healthcare, business and industry, sports, leisure, and corrections clients in the United States and internationally. It operates through two segments, Food and Support Services United States, and Food and Support Services International. The company offers food-related managed services, including dining, catering, food service management, and convenience-oriented retail services; non-clinical food and food-related support services, such as patient food and nutrition, retail food, environmental services, and procurement services; and plant operations and maintenance, custodial/housekeeping, energy management, grounds keeping, and capital project management services. It also provides on-site restaurants, catering, convenience stores, and executive dining services; beverage and vending services; and facility management services comprising landscaping, transportation, capital program management, payment services, and other facility consulting services relating to building operations. In addition, the company offers concessions, banquet, and catering services; retail services and merchandise sale, recreational, and lodging services; and facility management services at sports, entertainment, and recreational facilities. Further, it offers correctional food; and operates commissaries, laundry facilities, and property rooms. It primarily serves business and industry, sports, leisure and corrections, education, healthcare, public institutions, manufacturing, transportation, service, and other industries. The company was formerly known as ARAMARK Holdings Corporation. Aramark was founded in 1959 and is based in Philadelphia, Pennsylvania.

About CorVel

CorVel Corporation provides workers’ compensation, auto, liability, and health solutions. It applies technology, including artificial intelligence, machine learning, and natural language processing to enhance the managing of episodes of care and the related health care costs. The company also offers network solutions services, including automated medical fee auditing, preferred provider management and reimbursement, retrospective utilization review, facility claim review, professional review, pharmacy, directed care, clearinghouse, independent medical examination, and inpatient medical bill review services, as well as Medicare solutions. In addition, it provides a range of patient management services, such as claims management, case management, 24/7 nurse triage, utilization management, vocational rehabilitation, and life care planning, as well as processing of claims for self-insured payors with respect to property and casualty insurance. The company offers solutions to employers, third party administrators, insurance companies, and government agencies to assist them in managing the medical costs and monitoring the quality of care associated with healthcare claims. CorVel Corporation was incorporated in 1987 and is based in Fort Worth, Texas.