Resources Connection (NASDAQ: RECN) and CBIZ (NYSE:CBZ) are both small-cap business services companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, dividends, profitabiliy, earnings, risk, analyst recommendations and institutional ownership.
This is a breakdown of recent ratings and recommmendations for Resources Connection and CBIZ, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Resources Connection currently has a consensus price target of $12.00, suggesting a potential downside of 12.41%. Given Resources Connection’s higher probable upside, equities analysts plainly believe Resources Connection is more favorable than CBIZ.
Earnings and Valuation
This table compares Resources Connection and CBIZ’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Resources Connection||$587.31 million||0.69||$46.28 million||$0.63||21.75|
|CBIZ||$817.05 million||0.98||$92.33 million||$0.80||18.69|
CBIZ has higher revenue and earnings than Resources Connection. CBIZ is trading at a lower price-to-earnings ratio than Resources Connection, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
85.0% of Resources Connection shares are owned by institutional investors. Comparatively, 85.0% of CBIZ shares are owned by institutional investors. 8.6% of Resources Connection shares are owned by company insiders. Comparatively, 7.2% of CBIZ shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Risk and Volatility
Resources Connection has a beta of 1.21, indicating that its stock price is 21% more volatile than the S&P 500. Comparatively, CBIZ has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500.
This table compares Resources Connection and CBIZ’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Resources Connection pays an annual dividend of $0.44 per share and has a dividend yield of 3.2%. CBIZ does not pay a dividend. Resources Connection pays out 69.8% of its earnings in the form of a dividend.
CBIZ beats Resources Connection on 9 of the 16 factors compared between the two stocks.
About Resources Connection
Resources Connection, Inc. is a multinational consulting firm. The Company’s operating entities primarily provide services under the name Resources Global Professionals (RGP). The Company provides consulting and business initiative support services to its global client base in the areas of accounting; finance; corporate governance, risk and compliance (GRC) management; corporate advisory, strategic communications and restructuring; information management; human capital; supply chain management, and legal and regulatory. The Company provides its services and solutions to a client base in a range of industries. Its finance and accounting services encompass accounting operations, financial reporting, internal controls, financial analyses and business transactions. It offers a range of technology solutions, which include enterprise resource planning systems; strategic front-of-the-house systems; human resources (HR) information systems, and supply chain management systems, among others.
CBIZ, Inc. (CBIZ) is engaged in the professional services business. The Company operates its professional services business through acquiring and integrating accounting and financial service providers, group health benefits consulting firms, property and casualty brokerage firms, payroll service providers, and valuation and other service firms throughout the United States. Its segments include Financial Services, Benefits and Insurance Services, National Practices, and Corporate and Other. The Financial Services group includes accounting and tax, government healthcare consulting, financial advisory, valuation, and risk and advisory services. The Benefits and Insurance Services group includes group health benefits consulting, payroll, property and casualty, and retirement plan services. The National Practices segment includes managed networking and hardware services, and healthcare consulting.
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