Resources Connection (NASDAQ:RGP – Get Rating) and ALJ Regional (NASDAQ:ALJJ – Get Rating) are both small-cap business services companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, institutional ownership and risk.
Analyst Ratings
This is a summary of recent ratings and price targets for Resources Connection and ALJ Regional, as reported by MarketBeat.
Get Resources Connection alerts:| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Resources Connection | 0 | 0 | 1 | 0 | 3.00 |
| ALJ Regional | 0 | 0 | 0 | 0 | N/A |
Resources Connection currently has a consensus target price of $25.00, suggesting a potential upside of 28.21%. Given Resources Connection's higher possible upside, equities analysts clearly believe Resources Connection is more favorable than ALJ Regional.
Volatility & Risk
Resources Connection has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500. Comparatively, ALJ Regional has a beta of 1.55, meaning that its share price is 55% more volatile than the S&P 500.Earnings & Valuation
This table compares Resources Connection and ALJ Regional's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Resources Connection | $805.02 million | 0.82 | $67.18 million | $2.00 | 9.75 |
| ALJ Regional | $440.85 million | 0.14 | -$4.64 million | $2.54 | 0.64 |
Resources Connection has higher revenue and earnings than ALJ Regional. ALJ Regional is trading at a lower price-to-earnings ratio than Resources Connection, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
84.1% of Resources Connection shares are owned by institutional investors. Comparatively, 9.9% of ALJ Regional shares are owned by institutional investors. 8.0% of Resources Connection shares are owned by company insiders. Comparatively, 66.3% of ALJ Regional shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Profitability
This table compares Resources Connection and ALJ Regional's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Resources Connection | 8.34% | 18.62% | 12.09% |
| ALJ Regional | 41.83% | 217.41% | 45.20% |
Summary
Resources Connection beats ALJ Regional on 7 of the 13 factors compared between the two stocks.
About Resources Connection
(Get Rating)
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 transactions, including integration and divestitures, bankruptcy/restructuring, going public readiness and support, financial process optimization, and system implementation; and regulations, such as accounting regulations, internal audit and compliance, data privacy and security, healthcare compliance, and regulatory compliance. It also provides transformations services comprising finance transformation, digital transformation, supply chain management, cloud migration, and data design and analytics. The company has a strategic alliance with Kotter International, Inc. to accelerate joint business development initiatives. 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 ALJ Regional
(Get Rating)
ALJ Regional Holdings, Inc. provides call center, back-office, staffing, and toll collection services to government and commercial clients in the healthcare, utility, toll, transportation, and toll revenue collection industries in the United States. It operates through two segments, Faneuil and Phoenix. The Faneuil segment offers customer contact centers, fulfillment operations, and information technology services, as well as manual and electronic toll collection, violation processing, and medical device tracking services. This segment also provides customer relationship management; billing, payment, and claims processing; data entry; document management; operational expertise; workforce and support analytics; quality assurance; staffing; and system support and maintenance services. The Phoenix segment manufactures book components; educational materials and related products; heavily illustrated books; and specialty commercial products. This segment also provides label, printing, and packaging solutions. The company was formerly known as YouthStream Media Networks, Inc. and changed its name to ALJ Regional Holdings, Inc. in October 2006. ALJ Regional Holdings, Inc. was incorporated in 1999 and is based in New York, New York.
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