Resources Connection (NASDAQ:RGP – Get Free Report) and Forrester Research (NASDAQ:FORR – Get Free Report) are both small-cap industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.
Dividends
Resources Connection pays an annual dividend of $0.28 per share and has a dividend yield of 6.5%. Forrester Research pays an annual dividend of $0.80 per share and has a dividend yield of 6.7%. Resources Connection pays out -23.3% of its earnings in the form of a dividend. Forrester Research pays out -35.6% 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. Forrester Research is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk and Volatility
Resources Connection has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500. Comparatively, Forrester Research has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Resources Connection | 1 | 1 | 2 | 0 | 2.25 |
| Forrester Research | 1 | 1 | 0 | 0 | 1.50 |
Resources Connection presently has a consensus target price of $7.00, indicating a potential upside of 63.55%. Given Resources Connection’s stronger consensus rating and higher probable upside, equities analysts clearly believe Resources Connection is more favorable than Forrester Research.
Earnings and Valuation
This table compares Resources Connection and Forrester Research”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Resources Connection | $452.01 million | 0.33 | -$40.60 million | ($1.20) | -3.57 |
| Forrester Research | $381.04 million | 0.60 | -$119.36 million | ($2.25) | -5.32 |
Resources Connection has higher revenue and earnings than Forrester Research. Forrester Research is trading at a lower price-to-earnings ratio than Resources Connection, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
93.2% of Resources Connection shares are held by institutional investors. Comparatively, 55.2% of Forrester Research shares are held by institutional investors. 7.9% of Resources Connection shares are held by insiders. Comparatively, 40.7% of Forrester Research shares are held by 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 Resources Connection and Forrester Research’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Resources Connection | -8.98% | -4.63% | -3.16% |
| Forrester Research | -11.17% | 6.19% | 1.93% |
Summary
Resources Connection beats Forrester Research on 9 of the 16 factors compared between the two stocks.
About Resources Connection
Resources Connection, Inc. provides consulting services to business customers under the Resources Global Professionals name in North America, Europe, and the Asia Pacific. The company offers services in the areas of transactions, including integration and divestitures, bankruptcy/restructuring, going public readiness and support, financial process optimization, and system implementation; and regulations, such as accounting regulations, internal audit and compliance, data privacy and security, healthcare compliance, and regulatory compliance. It provides transformations services comprising finance transformation, digital transformation, supply chain management, cloud migration, and data design and analytics. The company was formerly known as RC Transaction Corp. and changed its name to Resources Connection, Inc. in August 2000. Resources Connection, Inc. was founded in 1996 and is headquartered in Irvine, California.
About Forrester Research
Forrester Research, Inc. operates as an independent research and advisory company in the United States and internationally. The company operates in three segments: Research, Consulting, and Events. The Research segment primary subscription research services include Forrester Decisions, Forrester Research, and SiriusDecisions Research, which are designed to provide business and technology leaders with a proven path to growth through customer obsession. This segment delivers content, such as future trends, predictions, and market forecasts; deep consumer and business buyer data and insights; curated best practice models and tools to run business functions; operational and performance benchmarking data; and technology and service market landscapes and vendor evaluations. The Consulting segment provides consulting projects, include conducting maturity assessments, prioritizing best practices, developing strategies, building business cases, selecting technology vendors, structuring organizations, developing content marketing strategies and collateral, and sales tools; and advisory services. The Events segment hosts events related to business-to-business marketing, sales and product leadership, customer experience, security and risk, new technology and innovation, and data strategies and insights. The company sells its products and services through direct sales force in various locations. Forrester Research, Inc. was incorporated in 1983 and is headquartered in Cambridge, Massachusetts.
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