Huron Consulting Group (NASDAQ: HURN) and Resources Connection (NASDAQ:RECN) are both small-cap business services companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, dividends, analyst recommendations and valuation.
Institutional and Insider Ownership
88.5% of Huron Consulting Group shares are held by institutional investors. Comparatively, 82.2% of Resources Connection shares are held by institutional investors. 2.7% of Huron Consulting Group shares are held by insiders. Comparatively, 8.6% of Resources Connection shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Huron Consulting Group and Resources Connection’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Huron Consulting Group||$731.79 million||1.00||$112.11 million||($5.98)||-5.51|
|Resources Connection||$583.41 million||0.65||$41.75 million||$0.55||23.09|
Huron Consulting Group has higher revenue and earnings than Resources Connection. Huron Consulting Group is trading at a lower price-to-earnings ratio than Resources Connection, indicating that it is currently the more affordable of the two stocks.
Resources Connection pays an annual dividend of $0.48 per share and has a dividend yield of 3.8%. Huron Consulting Group does not pay a dividend. Resources Connection pays out 87.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Risk & Volatility
Huron Consulting Group has a beta of 0.16, meaning that its share price is 84% less volatile than the S&P 500. Comparatively, Resources Connection has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500.
This is a summary of current ratings and recommmendations for Huron Consulting Group and Resources Connection, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Huron Consulting Group||0||2||2||0||2.50|
Resources Connection has a consensus target price of $13.50, suggesting a potential upside of 6.30%. Given Resources Connection’s higher possible upside, analysts clearly believe Resources Connection is more favorable than Huron Consulting Group.
This table compares Huron Consulting Group and Resources Connection’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Huron Consulting Group||-15.94%||8.83%||4.64%|
About Huron Consulting Group
Huron Consulting Group Inc. is a global professional services firm. The Company offers solutions in operations, advisory services, technology and analytics for healthcare, higher education, life sciences and commercial sectors. The Company’s segments include Healthcare, Education and Life Sciences, and Business Advisory. Its Healthcare segment provides advisory services, from strategy setting through implementation, in the areas of organizational and resource alignment, clinical transformation, financial and operational performance, patient and caregiver engagement, and technology implementation and optimization. Its Education and Life Sciences segment provides management consulting and technology solutions to the higher education and academic medical centers, pharmaceutical and medical device, biotechnology and research industries. The Business Advisory segment’s primary service lines include Enterprise Solutions and Analytics, and Business Advisory.
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.
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