WEX (NYSE:WEX) and Resources Connection (NASDAQ:RECN) are both business services companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.
This table compares WEX and Resources Connection’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
WEX has a beta of 1.74, meaning that its share price is 74% more volatile than the S&P 500. Comparatively, Resources Connection has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500.
This is a summary of recent ratings and target prices for WEX and Resources Connection, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
WEX currently has a consensus price target of $193.00, suggesting a potential downside of 2.20%. Resources Connection has a consensus price target of $15.33, suggesting a potential downside of 8.18%. Given WEX’s stronger consensus rating and higher possible upside, equities research analysts clearly believe WEX is more favorable than Resources Connection.
Resources Connection pays an annual dividend of $0.52 per share and has a dividend yield of 3.1%. WEX does not pay a dividend. Resources Connection pays out 53.1% of its earnings in the form of a dividend. Resources Connection has increased its dividend for 5 consecutive years.
Insider and Institutional Ownership
99.1% of WEX shares are held by institutional investors. Comparatively, 81.2% of Resources Connection shares are held by institutional investors. 4.6% of WEX shares are held by company insiders. Comparatively, 9.8% of Resources Connection shares are held by company 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.
Earnings and Valuation
This table compares WEX and Resources Connection’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|WEX||$1.25 billion||6.80||$160.26 million||$4.70||41.99|
|Resources Connection||$654.13 million||0.80||$18.82 million||$0.98||17.04|
WEX has higher revenue and earnings than Resources Connection. Resources Connection is trading at a lower price-to-earnings ratio than WEX, indicating that it is currently the more affordable of the two stocks.
WEX beats Resources Connection on 13 of the 17 factors compared between the two stocks.
WEX Inc. provides corporate card payment solutions in North and South America, the Asia Pacific, and Europe. It operates through three segments: Fleet Solutions, Travel and Corporate Solutions, and Health and Employee Benefit Solutions. The Fleet Solutions segment offers fleet vehicle payment and processing services. Its services include customer, account activation, and account retention services; authorization and billing inquiries, and account maintenance services; premium fleet services; credit and collections services; and merchant services. This segment markets its products directly to commercial and government vehicle fleet customers with small, medium, and large fleets, as well as with over-the-road and long haul fleets; and indirectly through co-branded and private label relationships. The Travel and Corporate Solutions segment provides payment processing solutions for corporate payment and transaction monitoring needs. Its products include virtual cards that are used for transactions where no card is presented and that require pre-authorization; and prepaid and gift card products that enables secure payment and financial management solutions with single card options, access to open or closed loop redemption, load limits, and with various expirations. This segment markets its products directly to commercial and government organizations. The Health and Employee Benefit Solutions segment offers healthcare payment products and software-as-a-service consumer directed platforms for healthcare market, as well as payroll related and employee benefit products in Brazil. The company was formerly known as Wright Express Corporation and changed its name to WEX Inc. in October 2012. WEX Inc. was founded in 1983 and is headquartered in South Portland, Maine.
About Resources Connection
Resources Connection, Inc. provides business consulting services under the Resources Global Professionals name in North America, Europe, and the Asia Pacific. The company offers process transformation and optimization, financial reporting and analysis, technical and operational accounting, and merger and acquisition due diligence and integration services; new accounting standards implementation and remediation support services; and audit readiness, and preparation and response services. It also provides information management services comprising program and project management, business and technology integration, data strategy, and business performance management. In addition, the company offers corporate advisory, strategic and crisis communications, and restructuring services; and governance, risk, and compliance (GRC) management services that include governance, assessments, auditing and automation of programs managing regulatory compliance, enterprise risk management, internal audits, operational risk management, and data security and privacy services. Further, it provides strategy development, procurement and supplier management, logistics and materials management, supply chain planning and forecasting, and unique device identification compliance; and change management, organization development and effectiveness, employment engagement, compensation and incentive plan strategies and design, and optimization of human resources technology and operations. Additionally, the company offers legal and regulatory supporting services for commercial transactions, global compliance initiatives, law department operations, and law department business strategy and analytics. It also provides policyIQ, a cloud-based GRC software application. 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.
Receive News & Ratings for WEX Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for WEX and related companies with MarketBeat.com's FREE daily email newsletter.