Investors are weighing options between two small-cap business services companies: UMC, Inc. and Black Diamond Group. A recent comparison of these firms highlights their respective strengths and weaknesses in areas such as volatility, earnings, and profitability.
Volatility and Risk Assessment
UMC exhibits considerable volatility with a beta of 33.65. This indicates that its share price is 3,265% more volatile than the S&P 500. In stark contrast, Black Diamond Group has a beta of 0.64, suggesting its share price is 36% less volatile than the broader market index. This significant difference in volatility could influence investor sentiment and risk assessment as they consider which stock to purchase.
Valuation and Earnings Comparison
An analysis of revenue and earnings reveals that Black Diamond Group outperforms UMC in gross revenue and earnings per share (EPS). This financial strength positions Black Diamond Group as a more attractive option for investors seeking stability and profitability. Furthermore, a summary of current ratings from MarketBeat indicates that analysts favor Black Diamond Group over UMC, enhancing its appeal in the competitive market landscape.
Profitability metrics also favor Black Diamond Group, which showcases stronger net margins, return on equity, and return on assets compared to UMC. This suggests that Black Diamond Group is not only generating more revenue but also managing its resources more effectively.
Company Profiles
UMC, Inc. specializes in providing medical insurance claims coding and processing, as well as electronic medical records storage and accounts receivable management services. Based in Pampa, Texas, UMC serves healthcare providers, including hospitals and medical clinics across the United States. Originally founded as United Medicorp, Inc. in 1989, the company rebranded in May 2007 to reflect its broader service offerings.
In contrast, Black Diamond Group Limited, headquartered in Calgary, Canada, offers modular space and workforce accommodation solutions. Established in 2003, the company operates through two main segments: Modular Space Solutions and Workforce Solutions. The former caters to various industries, including construction, healthcare, and education, providing modular rentals and related services. The Workforce Solutions segment focuses on rental accommodations and travel management logistics in regions such as Canada, the United States, and Australia.
As both companies operate in distinct sectors with differing risk profiles and financial performances, investors must weigh these factors carefully. Black Diamond Group currently surpasses UMC in seven out of eight key financial metrics, a strong indicator of its market position.
In conclusion, prospective investors should consider their risk tolerance and investment goals when evaluating UMC and Black Diamond Group. With Black Diamond’s robust earnings and lower volatility, it may present a more stable investment opportunity compared to the more speculative UMC.
