Barrett Business Services (NASDAQ:BBSI) vs. Brink’s (NYSE:BCO) Financial Analysis

Brink’s (NYSE:BCO) and Barrett Business Services (NASDAQ:BBSI) are both business services companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, institutional ownership, profitability and earnings.

Dividends

Brink’s pays an annual dividend of $1.02 per share and has a dividend yield of 1.2%. Barrett Business Services pays an annual dividend of $0.32 per share and has a dividend yield of 0.7%. Brink’s pays out 27.6% of its earnings in the form of a dividend. Barrett Business Services pays out 16.4% 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. Brink’s has raised its dividend for 5 consecutive years and Barrett Business Services has raised its dividend for 1 consecutive years. Brink’s is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

95.0% of Brink’s shares are owned by institutional investors. Comparatively, 86.8% of Barrett Business Services shares are owned by institutional investors. 0.5% of Brink’s shares are owned by company insiders. Comparatively, 4.1% of Barrett Business Services shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Brink’s and Barrett Business Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Brink’s	0	0	1	0	3.00
Barrett Business Services	0	0	2	0	3.00

Brink’s presently has a consensus target price of $138.00, suggesting a potential upside of 57.43%. Barrett Business Services has a consensus target price of $45.00, suggesting a potential downside of 3.31%. Given Brink’s’ higher possible upside, analysts plainly believe Brink’s is more favorable than Barrett Business Services.

Profitability

This table compares Brink’s and Barrett Business Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Brink’s	3.29%	82.89%	4.69%
Barrett Business Services	4.45%	24.55%	7.09%

Earnings and Valuation

This table compares Brink’s and Barrett Business Services”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Brink’s	$5.01 billion	0.73	$162.90 million	$3.70	23.69
Barrett Business Services	$1.14 billion	1.04	$52.99 million	$1.95	23.87

Brink’s has higher revenue and earnings than Barrett Business Services. Brink’s 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.

Risk & Volatility

Brink’s has a beta of 1.43, indicating that its stock price is 43% more volatile than the S&P 500. Comparatively, Barrett Business Services has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500.

Summary

Brink’s beats Barrett Business Services on 9 of the 16 factors compared between the two stocks.

About Brink’s

The Brink’s Co. engages in providing cash management services, digital retail solutions, and ATM managed services. It operates through the following geographical segments: North America, Latin America, Europe, and Rest of World. The North America segment operates in the U.S. and Canada. The Latin America segment refers to the operations in Latin American countries. The Europe segment relates to operations in European countries. The Rest of World segment focuses on the operations in the Middle East, Africa, and Asia. The company was founded by Perry Brink and Fidelia Brink on May 5, 1859 and is headquartered in Richmond, VA.

About Barrett Business Services

Barrett Business Services, Inc. provides business management solutions for small and mid-sized companies in the United States. The company develops a 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 other administration functions for the client’s existing workforce. The company provides staffing and recruiting services, such as on-demand or short-term staffing assignment, contract staffing, direct placement, and long-term or indefinite-term on-site management services. It serves electronics manufacturers, light-manufacturing industries, agriculture-based companies, transportation and shipping enterprises, food processors, telecommunications companies, public utilities, general contractors in various construction-related fields, restaurant franchises, and professional services firms. Barrett Business Services, Inc. was incorporated in 1965 and is headquartered in Vancouver, Washington.