Barrett Business Services (NASDAQ: BBSI) and Kelly Services (NASDAQ:KELYA) are both small-cap business services companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitabiliy, earnings and institutional ownership.
This is a breakdown of current ratings and recommmendations for Barrett Business Services and Kelly Services, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Barrett Business Services||0||0||0||0||N/A|
Insider & Institutional Ownership
73.4% of Barrett Business Services shares are held by institutional investors. Comparatively, 65.6% of Kelly Services shares are held by institutional investors. 6.3% of Barrett Business Services shares are held by insiders. Comparatively, 13.3% of Kelly Services shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Volatility & Risk
Barrett Business Services has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500. Comparatively, Kelly Services has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500.
Barrett Business Services pays an annual dividend of $1.00 per share and has a dividend yield of 1.7%. Kelly Services pays an annual dividend of $0.30 per share and has a dividend yield of 1.3%. Barrett Business Services pays out 48.3% of its earnings in the form of a dividend. Kelly Services pays out 9.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Valuation and Earnings
This table compares Barrett Business Services and Kelly Services’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Barrett Business Services||$859.62 million||0.48||$27.55 million||$2.07||27.77|
|Kelly Services||$5.22 billion||0.17||$91.70 million||$3.15||7.32|
Kelly Services has higher revenue and earnings than Barrett Business Services. Kelly Services is trading at a lower price-to-earnings ratio than Barrett Business Services, indicating that it is currently the more affordable of the two stocks.
This table compares Barrett Business Services and Kelly Services’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Barrett Business Services||1.81%||34.17%||3.53%|
Barrett Business Services beats Kelly Services on 7 of the 13 factors compared between the two stocks.
Barrett Business Services Company Profile
Barrett Business Services, Inc. (BBSI) is a provider of business management solutions for small and mid-sized companies. The Company has developed a management platform that integrates a knowledge-based approach from the management consulting industry with tools from the human resource outsourcing industry. BBSI’s purpose is to advocate for business owners, particularly in the small and mid-sized business segment. The Company offers two categories of services: Professional Employer Services (PEO) and Staffing. Its staffing services include on-demand or short-term staffing assignments, contract staffing, direct placement, and long-term or indefinite-term on-site management. As of December 31, 2016, the Company operated in 20 states and the District of Columbia through a network of 57 branch locations in California, Oregon, Utah, Washington, Idaho, Arizona, Colorado, Maryland, North Carolina, Delaware, Nevada, Pennsylvania and Virginia.
Kelly Services Company Profile
Kelly Services, Inc. is a workforce solutions provider, which is engaged in offering a range of specialty services. The Company provides workforce solutions in three regions: the Americas; Europe, the Middle East and Africa (EMEA), and Asia Pacific (APAC). The Company’s segments are Americas Commercial, Americas Professional and Technical (Americas PT), EMEA Commercial, EMEA Professional and Technical (EMEA PT), and Outsourcing and Consulting Group (OCG). The Americas Commercial segment includes Office, Contact Center, Education, Marketing and Electronic Assembly. The Americas PT segment includes a range of specialty staffing services. The EMEA Commercial segment provides a range of staffing services, including Office, Contact Center and its temporary-to-hire service. The EMEA PT segment provides Engineering, Finance and Accounting services. The OCG segment delivers talent management solutions across multiple regions, skill sets and a spectrum of talent categories.
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