Xylem (NYSE:XYL – Get Free Report) and Montrose Environmental Group (NYSE:MEG – Get Free Report) are both business services companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, risk, earnings, valuation and institutional ownership.

This table compares Xylem and Montrose Environmental Group”s top-line revenue, earnings per share and valuation.

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

This is a summary of recent ratings for Xylem and Montrose Environmental Group, as reported by MarketBeat.

Xylem currently has a consensus price target of $166.90, suggesting a potential upside of 18.16%. Montrose Environmental Group has a consensus price target of $34.40, suggesting a potential upside of 34.11%. Given Montrose Environmental Group’s higher possible upside, analysts clearly believe Montrose Environmental Group is more favorable than Xylem.

Xylem has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500. Comparatively, Montrose Environmental Group has a beta of 1.84, meaning that its stock price is 84% more volatile than the S&P 500.

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

88.0% of Xylem shares are owned by institutional investors. Comparatively, 87.9% of Montrose Environmental Group shares are owned by institutional investors. 0.3% of Xylem shares are owned by company insiders. Comparatively, 11.9% of Montrose Environmental Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Xylem beats Montrose Environmental Group on 11 of the 14 factors compared between the two stocks.

Xylem Inc., together with its subsidiaries, engages in the design, manufacture, and servicing of engineered products and solutions worldwide. It operates through four segments: Water Infrastructure, Applied Water, Measurement & Control Solutions, and Integrated Solutions and Services. The Water Infrastructure segment offers products, including water, storm water, and wastewater pumps; controls and systems; filtration, disinfection, and biological treatment equipment; and mobile dewatering equipment and rental services under the ADI, Flygt, Godwin, Sanitaire, Magneto, Neptune Benson, Ionpure, Leopold, Wedeco, and Xylem Vue brands. The Applied Water segment provides pumps, valves, heat exchangers, controls, and dispensing equipment systems under the Goulds Water Technology, Bell & Gossett, A-C Fire Pump, Standard Xchange, Lowara, Jabsco, Xylem Vue, and Flojet brands. The Measurement & Control Solutions segment offers smart meters, networked communication devices, data analytics, test equipment, controls, sensor devices, software and managed services, and critical infrastructure services; and software and services, including cloud-based analytics, remote monitoring and data management, leak detection, condition assessment, asset management, and pressure monitoring solutions, as well as testing equipment. This segment sells its products under the Pure Technologies, Sensus, Smith Blair, WTW, Xylem Vue, and YSI brands. The Integrated Solutions and Services segment provides maintenance services, mobile services, digital outsourced solutions, wastewater systems, environmental remediation, odor and corrosion control, filtration, reverse osmosis, ion exchange, and deionization under Aquapro, WaterOne, and Ion Pure brands. Xylem Inc. was formerly known as ITT WCO, Inc. and changed its name to Xylem Inc. in May 2011. Xylem Inc. was incorporated in 2011 and is headquartered in Washington, District of Columbia.