Contrasting Sparta Commercial Services (OTCMKTS:SRCO) & Liquidity Services (NASDAQ:LQDT)

Liquidity Services (NASDAQ:LQDT) and Sparta Commercial Services (OTCMKTS:SRCO) are both small-cap business services companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, profitability, institutional ownership and earnings.

Valuation & Earnings

This table compares Liquidity Services and Sparta Commercial Services’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Liquidity Services	$314.46 million	2.09	$20.98 million	$0.65	33.19
Sparta Commercial Services	$260,000.00	33.02	$1.02 million	N/A	N/A

Liquidity Services has higher revenue and earnings than Sparta Commercial Services.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Liquidity Services and Sparta Commercial Services, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Liquidity Services	0	0	1	0	3.00
Sparta Commercial Services	0	0	0	0	N/A

Liquidity Services presently has a consensus price target of $27.00, suggesting a potential upside of 25.17%. Given Liquidity Services’ higher possible upside, research analysts clearly believe Liquidity Services is more favorable than Sparta Commercial Services.

Risk & Volatility

Liquidity Services has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500. Comparatively, Sparta Commercial Services has a beta of -0.69, meaning that its share price is 169% less volatile than the S&P 500.

Institutional & Insider Ownership

71.2% of Liquidity Services shares are owned by institutional investors. 29.8% of Liquidity Services shares are owned by company insiders. Comparatively, 0.5% of Sparta Commercial Services shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Liquidity Services and Sparta Commercial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Liquidity Services	6.30%	18.51%	10.37%
Sparta Commercial Services	-1,870.68%	N/A	-22,297.00%

Summary

Liquidity Services beats Sparta Commercial Services on 10 of the 11 factors compared between the two stocks.

About Liquidity Services

Liquidity Services, Inc. provides e-commerce marketplaces, self-directed auction listing tools, and value-added services in the United States and internationally. The company operates through four segments: GovDeals, Retail Supply Chain Group (RSCG), Capital Assets Group (CAG), and Machinio. Its marketplaces include liquidation.com that enable corporations to sell surplus and salvage consumer goods and retail capital assets; GovDeals marketplace, which provides self-directed service solutions in which sellers list their own assets that enables local and state government entities, and commercial businesses located in the United States and Canada to sell surplus and salvage assets; and AllSurplus, a centralized marketplace that connects global buyer base with assets from across the network of marketplaces in a single destination. The company also offers a suite of services, including surplus management, asset valuation, asset sales, marketing, returns management, asset recovery, and ecommerce services. In addition, it operates a global search engine platform for listing used equipment for sale in the construction, machine tool, transportation, printing, and agriculture sectors. The company offers products from industry verticals, such as consumer electronics, general merchandise, apparel, scientific equipment, aerospace parts and equipment, technology hardware, real estate, energy equipment, industrial capital assets, heavy equipment, fleet and transportation equipment, and specialty equipment. The company was incorporated in 1999 and is headquartered in Bethesda, Maryland.

About Sparta Commercial Services

Sparta Commercial Services, Inc. develops, markets, and manages business websites and mobile applications for smartphones and tablets under the iMobileApp name. It offers mobile applications for vehicle dealerships, racetracks, private clubs, country clubs, schools and entertainment venues, restaurants, grocery stores, and various other merchant types. The company also owns and manages websites, which sell motorcycle, recreational vehicle, and truck title history reports for consumers, retailers, municipals, nonprofits, auction houses, banks, and insurance companies; and designs, launches, maintains, and hosts websites for businesses, as well as provides text messaging services. In addition, it offers eCommerce, customer relationship management development and integration, search engine optimization, social media marketing, and online reviews website services to its clients. Further, the company provides an equipment-leasing product for local and state agencies that helps to finance their essential equipment needs, including police motorcycles, cruisers, buses, fire trucks, and EMS equipment; and a range of hemp-derived cannabinol products through newworldhealthcbd.com. The company was incorporated in 1980 and is headquartered in New York, New York.