Reviewing Resources Connection (NASDAQ:RGP) and Emerald (NYSE:EEX)

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

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Resources Connection $703.35 million 0.56 $28.28 million $0.98 12.34
Emerald $360.90 million 0.91 -$50.00 million $0.85 5.44

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

Risk & Volatility

Resources Connection has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500. Comparatively, Emerald has a beta of 1.87, suggesting that its share price is 87% more volatile than the S&P 500.

Institutional & Insider Ownership

83.6% of Resources Connection shares are owned by institutional investors. Comparatively, 27.3% of Emerald shares are owned by institutional investors. 9.0% of Resources Connection shares are owned by company insiders. Comparatively, 0.8% of Emerald shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings for Resources Connection and Emerald, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Resources Connection 0 1 1 0 2.50
Emerald 0 5 0 0 2.00

Resources Connection presently has a consensus price target of $12.50, indicating a potential upside of 3.39%. Emerald has a consensus price target of $4.99, indicating a potential upside of 7.97%. Given Emerald’s higher probable upside, analysts plainly believe Emerald is more favorable than Resources Connection.

Profitability

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

Net Margins Return on Equity Return on Assets
Resources Connection 3.78% 9.70% 5.78%
Emerald -402.06% 8.30% 2.74%

Summary

Resources Connection beats Emerald on 11 of the 14 factors compared between the two stocks.

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 business strategy and transformation, including program and project management, change management, transaction advisory, restructuring and bankruptcy advisory, executive search, human resources, supply chain, and legal services; and risk and compliance, such as information security and privacy, internal audit and compliance, and operational risk management areas. It also provides finance and accounting services comprising financial transformation, lease accounting, revenue recognition, equity administration and accounting, and tax; and technology and digital services that include business technology, data analytics, and robotics process automation. 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.

About Emerald

Emerald Holding, Inc. operates business-to-business (B2B) trade shows in the United States. The company operates trade shows in various industry sectors, including retail, design and construction, technology, equipment, and safety. It also operates content and content-marketing Websites, and related digital products, as well as produce publications. Emerald Expositions Events, Inc. was founded in 2013 and is based in San Juan Capistrano, California.

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