Contrasting InterCloud Systems (OTCMKTS:ICLD) & Resources Connection (OTCMKTS:RECN)

InterCloud Systems (OTCMKTS:ICLD) and Resources Connection (NASDAQ:RECN) are both small-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Analyst Ratings

This is a summary of recent ratings and target prices for InterCloud Systems and Resources Connection, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
InterCloud Systems 0 0 0 0 N/A
Resources Connection 0 1 0 0 2.00

Resources Connection has a consensus target price of $16.00, indicating a potential downside of 5.16%. Given Resources Connection’s higher possible upside, analysts clearly believe Resources Connection is more favorable than InterCloud Systems.

Profitability

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

Net Margins Return on Equity Return on Assets
InterCloud Systems N/A N/A N/A
Resources Connection 4.32% 11.96% 7.80%

Risk & Volatility

InterCloud Systems has a beta of 2.99, suggesting that its stock price is 199% more volatile than the S&P 500. Comparatively, Resources Connection has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500.

Insider & Institutional Ownership

83.5% of Resources Connection shares are held by institutional investors. 0.5% of InterCloud Systems shares are held by insiders. Comparatively, 9.8% of Resources Connection shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares InterCloud Systems and Resources Connection’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
InterCloud Systems $34.52 million 0.01 -$44.33 million N/A N/A
Resources Connection $729.00 million 0.74 $31.47 million $1.03 16.38

Resources Connection has higher revenue and earnings than InterCloud Systems.

Dividends

Resources Connection pays an annual dividend of $0.52 per share and has a dividend yield of 3.1%. InterCloud Systems does not pay a dividend. Resources Connection pays out 50.5% of its earnings in the form of a dividend. Resources Connection has increased its dividend for 6 consecutive years.

Summary

Resources Connection beats InterCloud Systems on 11 of the 13 factors compared between the two stocks.

InterCloud Systems Company Profile

InterCloud Systems, Inc. provides networking orchestration and automation for software-defined networking (SDN) and network function virtualization environments to telecommunications service provider and corporate enterprise markets in the United States and internationally. It operates through two segments, Applications and Infrastructure and Professional Services. The Applications and Infrastructure segment provides applications and services, including SDN training, SDN software development and integration, and vertical network function validation; and cabling and other field installations, as well as designs, engineers, installs, and maintains various types of Wi-Fi and DAS networks to enterprise customers. The Professional Services segment engages in the design and deployment of SDN and software-defined wide area networking solutions for enterprise and carrier accounts. The company is based in Shrewsbury, New Jersey.

Resources Connection Company Profile

Resources Connection, Inc. provides business consulting services under the Resources Global Professionals name in North America, Europe, and the Asia Pacific. The company offers process transformation and optimization, financial reporting and analysis, technical and operational accounting, and merger and acquisition due diligence and integration services; new accounting standards implementation and remediation support services; and audit readiness, and preparation and response services. It also provides information management services comprising program and project management, business and technology integration, data strategy, and business performance management. In addition, the company offers corporate advisory, strategic and crisis communications, and restructuring services; and governance, risk, and compliance (GRC) management services that include governance, assessments, auditing and automation of programs managing regulatory compliance, enterprise risk management, internal audits, operational risk management, and data security and privacy services. Further, it provides strategy development, procurement and supplier management, logistics and materials management, supply chain planning and forecasting, and unique device identification compliance; and change management, organization development and effectiveness, employment engagement, compensation and incentive plan strategies and design, and optimization of human resources technology and operations. Additionally, the company offers legal and regulatory supporting services for commercial transactions, global compliance initiatives, law department operations, and law department business strategy and analytics. It also provides policyIQ, a cloud-based GRC software application. 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.

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