Resources Connection (NASDAQ:RGP) and Conduent (NASDAQ:CNDT) are both small-cap business services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, earnings, risk and analyst recommendations.
Analyst Recommendations
This is a breakdown of current recommendations for Resources Connection and Conduent, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Resources Connection | 0 | 0 | 1 | 0 | 3.00 |
| Conduent | 0 | 1 | 1 | 0 | 2.50 |
Resources Connection currently has a consensus price target of $15.00, suggesting a potential upside of 7.76%. Conduent has a consensus price target of $6.00, suggesting a potential downside of 9.23%. Given Resources Connection's stronger consensus rating and higher probable upside, research analysts plainly believe Resources Connection is more favorable than Conduent.
Earnings and Valuation
This table compares Resources Connection and Conduent's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Resources Connection | $703.35 million | 0.65 | $28.28 million | $0.98 | 14.23 |
| Conduent | $4.47 billion | 0.31 | $-1,934,000,000.00 | $0.62 | 10.65 |
Resources Connection has higher earnings, but lower revenue than Conduent. Conduent is trading at a lower price-to-earnings ratio than Resources Connection, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Resources Connection and Conduent's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Resources Connection | 1.90% | 7.25% | 4.32% |
| Conduent | -16.35% | 11.40% | 3.16% |
Volatility and Risk
Resources Connection has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, Conduent has a beta of 1.92, meaning that its share price is 92% more volatile than the S&P 500.
Insider & Institutional Ownership
80.2% of Resources Connection shares are held by institutional investors. Comparatively, 72.9% of Conduent shares are held by institutional investors. 9.0% of Resources Connection shares are held by insiders. Comparatively, 0.3% of Conduent shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Summary
Resources Connection beats Conduent on 10 of the 13 factors compared between the two stocks.
