Head to Head Review: Brink’s (NYSE:BCO) & Barrett Business Services (NASDAQ:BBSI)

Barrett Business Services (NASDAQ:BBSI) and Brink’s (NYSE:BCO) are both business services companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, profitability, risk and earnings.

Valuation and Earnings

This table compares Barrett Business Services and Brink’s”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Barrett Business Services	$1.14 billion	1.03	$52.99 million	$1.95	23.44
Brink’s	$5.01 billion	0.77	$162.90 million	$3.70	24.82

Brink’s has higher revenue and earnings than Barrett Business Services. Barrett Business Services is trading at a lower price-to-earnings ratio than Brink’s, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Barrett Business Services and Brink’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Barrett Business Services	4.45%	24.55%	7.09%
Brink’s	3.29%	82.89%	4.69%

Volatility & Risk

Barrett Business Services has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500. Comparatively, Brink’s has a beta of 1.43, meaning that its stock price is 43% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Barrett Business Services and Brink’s, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Barrett Business Services	0	0	2	0	3.00
Brink’s	0	0	1	0	3.00

Barrett Business Services presently has a consensus price target of $45.00, indicating a potential downside of 1.53%. Brink’s has a consensus price target of $138.00, indicating a potential upside of 50.29%. Given Brink’s’ higher possible upside, analysts clearly believe Brink’s is more favorable than Barrett Business Services.

Insider and Institutional Ownership

86.8% of Barrett Business Services shares are owned by institutional investors. Comparatively, 95.0% of Brink’s shares are owned by institutional investors. 4.1% of Barrett Business Services shares are owned by insiders. Comparatively, 0.7% of Brink’s shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Barrett Business Services pays an annual dividend of $0.32 per share and has a dividend yield of 0.7%. Brink’s pays an annual dividend of $1.02 per share and has a dividend yield of 1.1%. Barrett Business Services pays out 16.4% of its earnings in the form of a dividend. Brink’s pays out 27.6% 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. Barrett Business Services has raised its dividend for 1 consecutive years and Brink’s has raised its dividend for 5 consecutive years. Brink’s is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Brink’s beats Barrett Business Services on 10 of the 16 factors compared between the two stocks.

About Barrett Business Services

Barrett Business Services, Inc. provides business management solutions for small and mid-sized companies in the United States. The company develops a management platform that integrates a knowledge-based approach from the management consulting industry with tools from the human resource outsourcing industry. It offers professional employer services under which it enters into a client services agreement to establish a co-employment relationship with each client company, assuming responsibility for payroll, payroll taxes, workers compensation coverage, and other administration functions for the client’s existing workforce. The company provides staffing and recruiting services, such as on-demand or short-term staffing assignment, contract staffing, direct placement, and long-term or indefinite-term on-site management services. It serves electronics manufacturers, light-manufacturing industries, agriculture-based companies, transportation and shipping enterprises, food processors, telecommunications companies, public utilities, general contractors in various construction-related fields, restaurant franchises, and professional services firms. Barrett Business Services, Inc. was incorporated in 1965 and is headquartered in Vancouver, Washington.

About Brink’s

The Brink’s Co. engages in providing cash management services, digital retail solutions, and ATM managed services. It operates through the following geographical segments: North America, Latin America, Europe, and Rest of World. The North America segment operates in the U.S. and Canada. The Latin America segment refers to the operations in Latin American countries. The Europe segment relates to operations in European countries. The Rest of World segment focuses on the operations in the Middle East, Africa, and Asia. The company was founded by Perry Brink and Fidelia Brink on May 5, 1859 and is headquartered in Richmond, VA.