TTEC (NASDAQ: TTEC) and Barrett Business Services (NASDAQ:BBSI) are both small-cap business services companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, dividends and analyst recommendations.
Risk and Volatility
TTEC has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500. Comparatively, Barrett Business Services has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500.
This table compares TTEC and Barrett Business Services’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|TTEC||$1.48 billion||1.00||$7.25 million||$1.80||17.86|
|Barrett Business Services||$920.43 million||0.70||$25.17 million||$3.33||26.66|
Barrett Business Services has lower revenue, but higher earnings than TTEC. TTEC is trading at a lower price-to-earnings ratio than Barrett Business Services, indicating that it is currently the more affordable of the two stocks.
TTEC pays an annual dividend of $0.54 per share and has a dividend yield of 1.7%. Barrett Business Services pays an annual dividend of $1.00 per share and has a dividend yield of 1.1%. TTEC pays out 30.0% of its earnings in the form of a dividend. Barrett Business Services pays out 30.0% 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. TTEC is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a breakdown of recent ratings and target prices for TTEC and Barrett Business Services, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Barrett Business Services||0||0||1||0||3.00|
TTEC currently has a consensus target price of $43.00, indicating a potential upside of 33.75%. Barrett Business Services has a consensus target price of $105.00, indicating a potential upside of 18.28%. Given TTEC’s higher possible upside, equities research analysts clearly believe TTEC is more favorable than Barrett Business Services.
This table compares TTEC and Barrett Business Services’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Barrett Business Services||2.73%||34.14%||3.95%|
Institutional & Insider Ownership
26.1% of TTEC shares are held by institutional investors. Comparatively, 78.0% of Barrett Business Services shares are held by institutional investors. 70.0% of TTEC shares are held by insiders. Comparatively, 6.3% of Barrett Business Services shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Barrett Business Services beats TTEC on 9 of the 16 factors compared between the two stocks.
TTEC Holdings, Inc., formerly TeleTech Holdings, Inc., is a customer service provider that delivers consulting, technology, growth and customer care solutions on a global scale. The Company operates through four segments: Customer Management Services (CMS), Customer Growth Services (CGS), Customer Technology Services (CTS) and Customer Strategy Services (CSS). The CMS segment designs and manages clients’ front-to-back office processes to deliver just-in-time, personalized, multi-channel interactions. The CGS segment offers integrated sales and marketing solutions to help its clients in the business-to-consumer or business-to-business markets. The CTS segment includes operational and system design consulting, customer experience technology product, implementation and integration consulting services, and management of clients cloud and on premise solutions. The CSS segment provides professional services in customer experience strategy, and system and operational process optimization.
About Barrett Business Services
Barrett Business Services, Inc. provides business management solutions for small and medium-sized companies in the United States. The company has 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 certain other administration functions for the client's existing workforce. The company also provides staffing and recruiting services, such as on-demand or short-term staffing assignments, contract staffing, direct placement, long-term or indefinite-term on-site management. It serves electronics manufacturers, various light-manufacturing industries, agriculture-based companies, transportation and shipping enterprises, food processors, telecommunications companies, public utilities, general contractors in various construction-related fields, and professional services firms. Barrett Business Services, Inc. was founded in 1965 and is headquartered in Vancouver, Washington.
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