Financial Survey: Montrose Environmental Group (NYSE:MEG) & TSS (NASDAQ:TSSI)

TSS (NASDAQ:TSSI) and Montrose Environmental Group (NYSE:MEG) are both small-cap construction companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, earnings, dividends, risk and analyst recommendations.

Institutional and Insider Ownership

87.9% of Montrose Environmental Group shares are owned by institutional investors. 30.5% of TSS shares are owned by insiders. Comparatively, 11.9% of Montrose Environmental Group shares are owned by 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.

Volatility and Risk

TSS has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500. Comparatively, Montrose Environmental Group has a beta of 1.7, suggesting that its share price is 70% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for TSS and Montrose Environmental Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TSS	0	0	0	0	0.00
Montrose Environmental Group	0	2	3	0	2.60

Montrose Environmental Group has a consensus target price of $35.60, suggesting a potential upside of 70.45%. Given Montrose Environmental Group’s stronger consensus rating and higher probable upside, analysts clearly believe Montrose Environmental Group is more favorable than TSS.

Earnings and Valuation

This table compares TSS and Montrose Environmental Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TSS	$54.40 million	5.28	$70,000.00	$0.18	66.78
Montrose Environmental Group	$673.08 million	1.06	-$30.86 million	($1.49)	-14.02

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

Profitability

This table compares TSS and Montrose Environmental Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TSS	3.59%	87.89%	11.84%
Montrose Environmental Group	-5.28%	1.86%	0.78%

Summary

TSS beats Montrose Environmental Group on 8 of the 14 factors compared between the two stocks.

About TSS

TSS, Inc. offers planning, design, engineering, construction management, commissioning and maintenance services. It provides these services primarily for specialized facilities such as data centers, communications rooms, call centers, laboratories, trading floors, network operations centers, medical facilities and similar environments. TSS Inc., formerly known as Fortress International Group, Inc., is based in Columbia, United States.

About Montrose Environmental Group

Montrose Environmental Group, Inc. operates as an environmental services company in the United States, Canada, and internationally. The company operates in three segments: Assessment, Permitting and Response; Measurement and Analysis; and Remediation and Reuse. The Assessment, Permitting and Response segment provides scientific advisory and consulting services to support environmental assessments; environmental emergency response and recovery; toxicology consulting and environmental audits and permits for current operations; facility upgrades; new projects; decommissioning projects; and development projects. This segment also offers technical advisory and consulting services, including regulatory compliance support and planning, environmental, ecosystem and toxicological assessments, and support during responses to environmental disruptions. The Measurement and Analysis segment tests and analyzes air, water, and soil to determine concentrations of contaminants, as well as the toxicological impact of contaminants on flora, fauna, and human health. Its services include source and ambient air testing and monitoring, leak detection, and advanced analytical laboratory services, such as storm water, wastewater, and drinking water analysis. The Remediation and Reuse segment provides engineering, design, implementation, and operations and maintenance services primarily to treat contaminated water, remove contaminants from soil, or create biogas from waste. The company serves financial, oil and gas, utilities, construction, automotive, real-estate, midstream energy, manufacturing, commodities, petrochemical, food and beverage, telecommunications, and engineering industries, as well as local, state, provincial, and federal government entities. Montrose Environmental Group, Inc. was founded in 2012 and is headquartered in North Little Rock, Arkansas.