Robert Half (NYSE:RHI) and Resources Connection (NASDAQ:RGP) Critical Contrast

Robert Half (NYSE:RHI) and Resources Connection (NASDAQ:RGP) are both business services companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, risk, valuation, earnings, analyst recommendations, institutional ownership and profitability.

Valuation and Earnings

This table compares Robert Half and Resources Connection”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Robert Half	$5.46 billion	0.48	$251.60 million	$1.54	16.74
Resources Connection	$534.63 million	0.28	-$191.78 million	($5.72)	-0.78

Robert Half has higher revenue and earnings than Resources Connection. Resources Connection is trading at a lower price-to-earnings ratio than Robert Half, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

92.4% of Robert Half shares are held by institutional investors. Comparatively, 93.2% of Resources Connection shares are held by institutional investors. 3.1% of Robert Half shares are held by company insiders. Comparatively, 7.9% of Resources Connection shares are held by company 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.

Dividends

Robert Half pays an annual dividend of $2.36 per share and has a dividend yield of 9.2%. Resources Connection pays an annual dividend of $0.28 per share and has a dividend yield of 6.2%. Robert Half pays out 153.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Resources Connection pays out -4.9% of its earnings in the form of a dividend. Robert Half has increased its dividend for 22 consecutive years. Robert Half is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Robert Half and Resources Connection, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Robert Half	3	6	1	0	1.80
Resources Connection	2	0	2	0	2.00

Robert Half presently has a consensus target price of $38.25, indicating a potential upside of 48.37%. Resources Connection has a consensus target price of $6.00, indicating a potential upside of 33.78%. Given Robert Half’s higher probable upside, equities analysts plainly believe Robert Half is more favorable than Resources Connection.

Volatility and Risk

Robert Half has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500. Comparatively, Resources Connection has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500.

Profitability

This table compares Robert Half and Resources Connection’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Robert Half	2.85%	11.76%	5.54%
Resources Connection	-35.25%	2.11%	1.54%

Summary

Robert Half beats Resources Connection on 12 of the 17 factors compared between the two stocks.

About Robert Half

Robert Half Inc. provides talent solutions and business consulting services in North America, South America, Europe, Asia, and Australia. The company operates through Contract Talent Solutions, Permanent Placement Talent Solutions, and Protiviti segments. The Contract Talent Solutions segment provides contract engagement professionals in the fields of finance and accounting, technology, marketing and creative, legal and administrative, and customer support. This segment markets its services to clients and employment candidates through both national and local advertising activities, including radio, digital advertising, job boards, alliance partners, and events. The Permanent Placement Talent Solutions segment engages in the placement of full-time accounting, finance, and tax and accounting operations personnel. The Protiviti segment offers consulting services in the areas of internal audit, technology consulting, risk, and compliance consulting. It offers it services under the Robert Half brand name. The company was formerly known as Robert Half International Inc. and changed its name to Robert Half Inc. in July 2023. Robert Half Inc. was founded in 1948 and is headquartered in Menlo Park, California.

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.