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Using the FINVIZ.com stock screener, I selected for S&P 500 stocks with a price/earnings ratio below 20 and insider ownership at or greater than ten percent. I will analyze based upon key fundamentals but with particular emphasis on return on equity and net earnings per employee as compared to 5 competing companies with a substantially lower percentage of insider ownership. I am interested in learning if any correlations exist in terms of performance in these two areas. Although these 5 companies represent a small sample of the overall S&P population of companies, any significant difference in performance between these companies and their competitors may warrant further study of insider ownership’s impact.

Cintas Corporation (NASDAQ:CTAS) is a mid cap in the services sector, trading at about $30.43, which is 17.03 times trailing twelve month earnings. The price/earnings growth ratio is 1.47 and price to book is 1.80. The company’s return on equity is 11.10%. Year-over-year quarterly revenue growth is 10.10%, and the year-over-year earnings growth is 12.00%. Cintas’s debt/equity ratio is 60.80 and the current ratio is 2.40. The firm employees 30,000 full time equivalents and each contributes $8,416 to net income. Cintas Corporation is 13.47% insider owned.

Rival, G & K Services Inc. (GKSR) is a small cap trading at about $29.75, which is 17 times trailing twelve month earnings. The price/earnings growth ratio is 1.65 and price to book is 1.04. The company’s return on equity is 6.54%. Year-over-year quarterly revenue growth is 4.70% and the year-over-year earnings growth is -7.60%. G & K’s debt/equity ratio is 27.16 and the current ratio is 1.98. The company employs 7,500 full time equivalents and each contributes $4,329 to net income. G & K Services, Inc. is 0.74% insider owned. In this comparison, Cintas Corporation’s return on equity and net income per FTE is 70% and 94% better, respectively than rival G & K services.

Oracle Corporation (NYSE:ORCL) is a large cap in the technology sector, trading at about $31.69, which is 18.03 times trailing twelve month earnings. The price/earnings growth ratio is 0.98 and price to book is 3.80. The company’s return on equity is 24.76%. Year-over-year quarterly revenue growth is 11.60%, and the year-over-year earnings growth is 36.10%. Oracle’s debt/equity ratio is 35.86 and the current ratio is 3.00. The firm employs 108,000 full time equivalents, and each contributes $83,370 to net income. Oracle Corporation is 21.91% insider owned.

Competitor, SAP AG (NYSE:SAP), is a large cap in the technology sector, trading at about $58.78, which is 19.57 times trailing twelve month earnings. The price/earnings growth ratio is 1.13 and price to book is 4.52. The company’s return on equity is 26.04%. Year-over-year quarterly revenue growth is 13.50% and the year-over-year earnings growth is 150.20%. SAP’s debt/equity ratio is 34.53 and the current ratio is 1.77. The company employs 54,589 full time equivalents, and each contributes $65,764 to net income. SAP AG is 0.00% insider owned. In this comparison, Oracle Corporation’s return on equity is 5% lower but net income per FTE is 27% higher than rival SAP AG.

Scripps Networks Interactive, Inc. (NYSE:SNI) is a mid cap in the services sector, trading at about $42.21, which is 17.36 times trailing twelve month earnings. The price/earnings growth ratio is 0.93 and price to book is 3.96. The company’s return on equity is 30.73%. Year-over-year quarterly revenue growth is 7.90%, and the year-over-year earnings growth is -3.00%. Scripp’s debt/equity ratio is 47.92, and the current ratio is 5.84. The company employs 2,000 full time equivalents, and each contributes $231,860 to net income. Scripps Networks Interactive, Inc. is 30.11% insider owned.

Competitor, Discovery Communications, Inc. (NASDAQ:DISCA), is a mid cap in the services sector trading at about $41.91, which is 17.48 times trailing twelve month earnings. The price/earnings growth ratio is 0.74 and price to book is 2.53. The company’s return on equity is 15.17%. Year-over-year quarterly revenue growth is 18.30% and the year-over-year earnings growth is 27.40%. Discovery’s debt/equity ratio is 66.36, and the current ratio is 3.25. The company employs 4,200 full time equivalents, and each contributes $235,952 to net income. Discovery Communications, Inc. is 2.88% insider owned. In this comparison, Scripp’s return on equity is just over twice that of its rival and net income per FTE is 1.73% lower than rival, Discovery Communications, Inc.

Morgan Stanley (NYSE:MS) is a large cap in the financial sector, trading at about $16.38, which is 10.74 times trailing twelve month earnings. The price/earnings growth ratio is 1.09 and price to book is 0.51. The company’s return on equity is 8.69%. Year-over-year quarterly revenue growth is 46.40% and the year-over-year earnings growth is 1578.60%. Morgan Stanley’s debt/equity ratio is 592.18 and the current ratio is 1.66. The company employs 62,648 full time equivalents, and each contributes $47,248 to net income. Morgan Stanley is 9.95% insider owned.

Rival Goldman Sachs (NYSE:GS) is a large cap in the financial sector, trading at about $101.45, which is 15.43 times trailing twelve month earnings. The price/earnings growth ratio is 1.88 and price to book is 0.73. The company’s return on equity is 7.86%. Year-over-year, quarterly revenue growth is -59.70%, and the year-over-year earnings growth is -127.71%. Goldman Sachs’ debt/equity ratio is 687.01 and the current ratio is 1.47. The company employs 36,800 full time equivalents, and each contributes $102,174 to net income. Goldman Sachs’ is 5.88% insider owned. In this comparison, Morgan Stanley’s return on equity is a 10.56% improvement over Goldman Sachs', but net income per FTE is 53.76% lower than rival Goldman Sachs’. It’s worth mentioning that both firms received bailout money.

Kellogg Company (NYSE:K) is a large cap in the services sector, trading at about $49.81, which is 15.39 times trailing twelve month earnings. The price/earnings growth ratio is 1.82 and price to book is 7.75. The company’s return on equity is 52.50%. Year-over-year quarterly revenue growth is 4.90%, and the year-over-year earnings growth is -14.20%. Kellogg’s debt/equity ratio is 264.20, and the current ratio is 1.02. The company employs 30,645 full time equivalents, and each contributes $38,832 to net income. Kellogg Company is 22.16% insider owned.

General Mills, Inc. (NYSE:GSI) is a large cap in the services sector, trading at about $40.42, which is 15.49 times trailing twelve month earnings. The price/earnings growth ratio is 1.88 and price to book is 3.99. The company’s return on equity is 26.11%. Year-over-year quarterly revenue growth is 8.90%, and the year-over-year earnings growth is -14.10%. General Mill’s debt/equity ratio is 102.65, and the current ratio is 0.84. The company employs 35,000 full time equivalents, and each contributes $49,429 to net income. General Mills, Inc. is 0.12% insider owned. In this comparison, Kellogg’s return on equity is twice that of General Mills, but net income per FTE is 21.44% lower than rival General Mills, Inc.

Our take away from this exercise is high inside ownership seems to have no consistent relationship to performance as expressed by return on equity and net income per employee.

Source: 5 Cheap S&P Stocks With High Insider Ownership