Robert Half International Inc. (RHI Quick QuoteRHI ) is a staffing and risk consulting services provider that has performed brilliantly over the past year and has the potential to sustain the momentum in the near term. Consequently, if you haven’t taken advantage of the share-price appreciation yet, it’s time you add the stock to your portfolio.
What Makes Robert Half an Attractive Pick?
An Outperformer: A glimpse of the company’s price trend reveals that the stock has had an impressive run on the bourse over the past year. Shares of Robert Half have returned 90.3%, significantly outperforming the 32.6% growth of the Zacks S&P 500 composite.
Robert Half International Inc. Price
Robert Half International Inc. price | Robert Half International Inc. Quote
Solid Rank & VGM Score: Robert Half currently carries a Zacks Rank #2 (Buy) and has a Value Growth Momentum Score (VGM Score) of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. Thus, the company is a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: The direction of estimate revisions serves as an important pointer when it comes to the price of a stock. Six estimates for 2021 moved north over the past 60 days versus no southward revision for Robert Half, reflecting analysts’ confidence in the stock. Over the same period, the Zacks Consensus Estimate for the company’s 2021 earnings has moved 20.4% north.
Positive Earnings Surprise History: Robert Half has an impressive earnings surprise history. The company outpaced the consensus mark in all of the trailing four quarters, delivering an average beat of 21.1%.
Strong Growth Prospects: The Zacks Consensus Estimate of $5.02 for Robert Half’s 2021 earnings per share reflects year-over-year growth of 85.9%. Earnings are expected to register 2% growth in 2022. The company’s long-term expected earnings per share (EPS) growth rate is 22%.
Growth Factors: Protiviti, the company’s wholly-owned subsidiary through which it offers risk consulting, internal audit and information technology consulting services, is in great shape. It is focusing on technology consulting, with additional emphasis on cloud computing, cybersecurity and digital transformation. Protiviti revenues increased 61.6% year over year to $459 million in the second quarter. Adjusted gross margin of 30% increased 430 basis points year over year.
Robert Half has a strong balance sheet. The company had no debt at the end of second-quarter 2021 against a cash and cash equivalent balance of $543 million. The company paid out $156 million, $146 million and $136 million in dividends, respectively, in 2020, 2019 and 2018. It repurchased shares worth $138 million, $250 million and $351 million, respectively, in 2020, 2019 and 2018. Such shareholder-friendly initiatives not only instil investors’ confidence, but also positively impact the company’s earnings.
Other Stocks to Consider
Investors interested in the broader Business Services sector can also consider stocks like ManpowerGroup (MAN Quick QuoteMAN ) , Equifax (EFX Quick QuoteEFX ) and Genpact (G Quick QuoteG ) . While ManpowerGroup sports a Zacks Rank #1, Equifax and Genpact carry a Zacks Rank #2.
The long-term expected earnings per share (three to five years) growth rate for ManpowerGroup, Equifax and Genpactis pegged at 24.2%, 15.2% and 14.7%, respectively.