Head-To-Head Comparison: Star Equity (NASDAQ:STRR) versus Parsons (NYSE:PSN)

Parsons (NYSE:PSN) and Star Equity (NASDAQ:STRR) are both industrials companies, but which is the superior business? We will compare the two companies based on the strength of their institutional ownership, earnings, profitability, analyst recommendations, dividends, valuation and risk.

Institutional & Insider Ownership

98.0% of Parsons shares are owned by institutional investors. Comparatively, 3.8% of Star Equity shares are owned by institutional investors. 1.3% of Parsons shares are owned by company insiders. Comparatively, 31.6% of Star Equity shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

Parsons has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500. Comparatively, Star Equity has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500.

Valuation & Earnings

This table compares Parsons and Star Equity”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Parsons	$6.36 billion	0.84	$241.14 million	$1.37	37.04
Star Equity	$172.16 million	0.21	-$5.92 million	($3.06)	-3.20

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

Profitability

This table compares Parsons and Star Equity’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Parsons	2.33%	8.11%	3.74%
Star Equity	-4.35%	-4.21%	-2.39%

Analyst Recommendations

This is a summary of recent ratings for Parsons and Star Equity, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Parsons	1	4	11	0	2.62
Star Equity	2	0	1	1	2.25

Parsons presently has a consensus target price of $63.50, indicating a potential upside of 25.15%. Star Equity has a consensus target price of $28.00, indicating a potential upside of 185.71%. Given Star Equity’s higher possible upside, analysts plainly believe Star Equity is more favorable than Parsons.

Summary

Parsons beats Star Equity on 12 of the 15 factors compared between the two stocks.

About Parsons

Parsons Corporation provides integrated solutions and services in the defense, intelligence, and critical infrastructure markets in North America, the Middle East, and internationally. The company operates through Federal Solutions and Critical Infrastructure segments. The Federal Solutions segment provides critical technologies, such as cybersecurity; missile defense; intelligence; space launch and ground systems; space and weapon system resiliency; geospatial intelligence; signals intelligence; environmental remediation; border security, critical infrastructure protection; counter unmanned air systems; biometrics and bio surveillance solutions to U.S. Department of Defense, including military services; Missile Defense Agency, the Department of Energy; the Department of State; the Department of Homeland Security, and the Federal Aviation Administration. The Critical Infrastructure segment provides management, design, and engineering services, as well as offers leveraging sensor solutions. This segment develops digital solutions for next generation aviation, rail and transit, bridges, roads, and highways; and provides water and wastewater treatment systems; AI/ML, and digital twin and cyber systems integration services; planning, engineering, and management services for infrastructure, including bridges and tunnels, roads and highways, water and wastewater, and dams and reservoirs. Parsons Corporation was founded in 1944 and is headquartered in Chantilly, Virginia.

About Star Equity

Star Equity Holdings, Inc. engages in the construction business in the United States and internationally. It operates through two segments: Construction, and Investments. It manufactures modular housing units, structural wall panels, permanent wood foundation systems, and other engineered wood products; supplies general contractors with building materials; holds real estate assets; and manages investments. The company was formerly known as Digirad Corporation and changed its name to Star Equity Holdings, Inc. in December 2020. Star Equity Holdings, Inc. was founded in 1985 and is headquartered in Old Greenwich, Connecticut.