Analyzing TSS (NASDAQ:TSSI) and Montrose Environmental Group (NYSE:MEG)

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Montrose Environmental Group	$624.21 million	1.19	-$30.86 million	($1.49)	-14.57
TSS	$54.40 million	5.61	$70,000.00	$0.18	71.06

TSS has lower revenue, but higher earnings 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.

Insider and Institutional Ownership

87.9% of Montrose Environmental Group shares are held by institutional investors. 11.9% of Montrose Environmental Group shares are held by insiders. Comparatively, 30.5% of TSS shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

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

Volatility and Risk

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

Analyst Recommendations

This is a breakdown of current ratings for Montrose Environmental Group and TSS, as provided by MarketBeat.

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

Montrose Environmental Group presently has a consensus target price of $35.60, indicating a potential upside of 64.02%. Given Montrose Environmental Group’s stronger consensus rating and higher possible upside, analysts plainly believe Montrose Environmental Group is more favorable than TSS.

Summary

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

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.

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.