Analyzing Aramark (NYSE:ARMK) and K-Bro Linen (OTCMKTS:KBRLF)

K-Bro Linen (OTCMKTS:KBRLF) and Aramark (NYSE:ARMK) are both industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, risk, valuation, institutional ownership, earnings, analyst recommendations and profitability.

Profitability

This table compares K-Bro Linen and Aramark’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
K-Bro Linen	N/A	N/A	N/A
Aramark	1.93%	14.09%	3.21%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for K-Bro Linen and Aramark, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
K-Bro Linen	0	0	0	0	N/A
Aramark	0	2	9	0	2.82

Aramark has a consensus target price of $39.68, indicating a potential upside of 0.03%. Given Aramark’s higher probable upside, analysts clearly believe Aramark is more favorable than K-Bro Linen.

Institutional & Insider Ownership

49.3% of K-Bro Linen shares are owned by institutional investors. 1.9% of Aramark shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares K-Bro Linen and Aramark”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
K-Bro Linen	N/A	N/A	N/A	$1.58	16.60
Aramark	$19.95 billion	0.52	$674.11 million	$2.38	16.67

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

Dividends

K-Bro Linen pays an annual dividend of $1.27 per share and has a dividend yield of 4.8%. Aramark pays an annual dividend of $0.38 per share and has a dividend yield of 1.0%. K-Bro Linen pays out 80.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Aramark pays out 16.0% of its earnings in the form of a dividend.

Summary

Aramark beats K-Bro Linen on 10 of the 12 factors compared between the two stocks.

About K-Bro Linen

K-Bro Linen Inc., together with its subsidiaries, provides laundry and linen services to healthcare institutions, hotels, and other commercial organizations in Canada and the United Kingdom. Its services include processing, management, and distribution of general and operating room linens, such as sheets, blankets, towels, surgical gowns, tablecloths, and drapes and other linens. The company also offers other services, including bulk dock-to-dock, exchange cart preparation, cart delivery, surgical linen, distribution and control of employee uniforms, personal clothing, customer reporting, customer service visiting, and textile procurement services. In addition, it provides linen rental, workwear hire, and cleanroom garment services. The company was founded in 1954 and is headquartered in Edmonton, Canada.

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.