Head to Head Review: Resources Connection (NASDAQ:RGP) vs. CBIZ (NYSE:CBZ)

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

Volatility & Risk

CBIZ has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500. Comparatively, Resources Connection has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500.

Insider & Institutional Ownership

88.1% of CBIZ shares are held by institutional investors. Comparatively, 84.0% of Resources Connection shares are held by institutional investors. 5.4% of CBIZ shares are held by company insiders. Comparatively, 7.5% of Resources Connection shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CBIZ	7.67%	15.52%	5.96%
Resources Connection	7.01%	14.84%	11.16%

Analyst Ratings

This is a summary of current recommendations for CBIZ and Resources Connection, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CBIZ	0	0	0	0	N/A
Resources Connection	1	2	0	0	1.67

Resources Connection has a consensus target price of $16.50, suggesting a potential upside of 7.28%. Given Resources Connection’s higher probable upside, analysts clearly believe Resources Connection is more favorable than CBIZ.

Earnings and Valuation

This table compares CBIZ and Resources Connection’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CBIZ	$1.41 billion	1.96	$105.35 million	$2.27	24.47
Resources Connection	$775.64 million	0.67	$54.36 million	$1.60	9.61

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

Summary

CBIZ beats Resources Connection on 9 of the 12 factors compared between the two stocks.

About CBIZ

CBIZ, Inc. provides financial, insurance, and advisory services in the United States and Canada. It operates through three segments: Financial Services, Benefits and Insurance Services, and National Practices. The Financial Services segment offers accounting and tax, financial advisory, valuation, risk and advisory, and government healthcare consulting services. The Benefits and Insurance Services provides employee benefits consulting, payroll/human capital management, property and casualty insurance, and retirement and investment services. The National Practices segment offers information technology managed networking and hardware, and health care consulting services. The company primarily serves small and medium-sized businesses, as well as individuals, governmental entities, and not-for-profit enterprises. CBIZ, Inc. was incorporated in 1987 and is headquartered in Cleveland, Ohio.

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.