Critical Contrast: The Hackett Group (NASDAQ:HCKT) vs. CBIZ (NYSE:CBZ)

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

Analyst Recommendations

This is a breakdown of current ratings for The Hackett Group and CBIZ, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The Hackett Group	0	1	1	0	2.50
CBIZ	1	0	1	0	2.00

The Hackett Group presently has a consensus target price of $27.00, indicating a potential upside of 46.34%. Given The Hackett Group’s stronger consensus rating and higher possible upside, equities research analysts clearly believe The Hackett Group is more favorable than CBIZ.

Volatility & Risk

The Hackett Group has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500. Comparatively, CBIZ has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500.

Earnings and Valuation

This table compares The Hackett Group and CBIZ”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The Hackett Group	$309.11 million	1.62	$29.63 million	$0.38	48.55
CBIZ	$2.68 billion	1.04	$41.04 million	$1.52	33.72

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

Profitability

This table compares The Hackett Group and CBIZ’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
The Hackett Group	5.37%	24.12%	14.34%
CBIZ	3.89%	14.02%	5.76%

Institutional and Insider Ownership

78.1% of The Hackett Group shares are held by institutional investors. Comparatively, 87.4% of CBIZ shares are held by institutional investors. 15.4% of The Hackett Group shares are held by insiders. Comparatively, 5.0% of CBIZ shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

The Hackett Group beats CBIZ on 8 of the 13 factors compared between the two stocks.

About The Hackett Group

The Hackett Group, Inc. operates as an intellectual property-based executive advisory, strategic consulting, and digital transformation company in the United States, Europe, and internationally. The company operates through three segments: Global Strategy & Business Transformation, Oracle Solutions, and SAP Solutions. It offers Hackett Connect, an online searchable repository; best practice accelerators that provide web-based access to best practices, customized software configuration tools, and best practice process flows; advisor inquiry for access to fact-based advice on proven approaches and methods; best practice research that provides insights into the proven approaches; and peer interaction comprising member-led webcasts, annual best practice conferences, annual member forums, membership performance surveys, and client-submitted content, as well as IP-as-a-service and Hackett Institute programs. The company also provides benchmarking services that conduct studies for selling, general and administrative, finance, human resources, information technology, procurement, enterprise performance management, and shared services; and business transformation practices which help clients develop a coordinated digital transformation strategy. In addition, it offers oracle solutions that help clients to choose and deploy oracle applications that best meet their needs and objectives. Further, the company provides SAP solutions, including planning, architecture, and vendor evaluation and selection through implementation, customization, testing, and integration; post-implementation support, change and exception management, process transparency, system documentation, and end-user training; and off-shore application development, and application maintenance and support services. The company was formerly known as Answerthink, Inc. and changed its name to The Hackett Group, Inc. in 2008. The Hackett Group, Inc. was founded in 1991 and is headquartered in Miami, Florida.

About CBIZ

CBIZ, Inc. provides financial, insurance, and advisory services in the United States and Canada. It operates through Financial Services, Benefits and Insurance Services, and National Practices segments. 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 Independence, Ohio.