CDI Corporation (NYSE: CDI) and Barrett Business Services (NASDAQ:BBSI) are both small-cap construction companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, risk, profitabiliy, analyst recommendations and dividends.

Institutional & Insider Ownership

46.3% of CDI Corporation shares are held by institutional investors. Comparatively, 73.4% of Barrett Business Services shares are held by institutional investors. 8.8% of CDI Corporation 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, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for CDI Corporation and Barrett Business Services, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CDI Corporation 0 0 0 0 N/A
Barrett Business Services 0 0 0 0 N/A

Earnings & Valuation

This table compares CDI Corporation and Barrett Business Services’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CDI Corporation $818.41 million 0.15 -$8.17 million ($1.80) -3.53
Barrett Business Services $859.62 million 0.48 $27.55 million $2.07 27.62

Barrett Business Services has higher revenue and earnings than CDI Corporation. CDI Corporation 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.

Dividends

Barrett Business Services pays an annual dividend of $1.00 per share and has a dividend yield of 1.7%. CDI Corporation does not pay a dividend. Barrett Business Services pays out 48.3% of its earnings in the form of a dividend.

Profitability

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

Net Margins Return on Equity Return on Assets
CDI Corporation -4.10% -7.85% -4.84%
Barrett Business Services 1.81% 34.17% 3.53%

Volatility & Risk

CDI Corporation has a beta of 1.94, indicating that its share price is 94% more volatile than the S&P 500. Comparatively, Barrett Business Services has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500.

Summary

Barrett Business Services beats CDI Corporation on 9 of the 12 factors compared between the two stocks.

About CDI Corporation

CDI Corp. provides engineering, information technology and staffing solutions. The Company operates in three segments: Global Engineering and Technology Solutions (GETS), Professional Staffing Services (PSS) and Management Recruiters International (MRI). It provides staffing services through its MRINetwork of franchisees. The GETS segment provides engineering and information technology solutions that involve the production of deliverable work products or services performed at its facility or at a customer’s facility. The PSS segment provides technical and professional personnel for discrete periods of time to augment the customer’s workforce in times of project, seasonal, peak period or business cycle needs. The MRI segment is a global franchisor that does business as MRINetwork and provides the use of its trademarks, business systems and training and support services to its franchisees. It serves the oil, gas and chemicals, aerospace and industrial equipment, and hi-tech industries.

About Barrett Business Services

Barrett Business Services, Inc. (BBSI) is a provider of business management solutions for small and mid-sized companies. The Company has developed a management platform that integrates a knowledge-based approach from the management consulting industry with tools from the human resource outsourcing industry. BBSI’s purpose is to advocate for business owners, particularly in the small and mid-sized business segment. The Company offers two categories of services: Professional Employer Services (PEO) and Staffing. Its staffing services include on-demand or short-term staffing assignments, contract staffing, direct placement, and long-term or indefinite-term on-site management. As of December 31, 2016, the Company operated in 20 states and the District of Columbia through a network of 57 branch locations in California, Oregon, Utah, Washington, Idaho, Arizona, Colorado, Maryland, North Carolina, Delaware, Nevada, Pennsylvania and Virginia.

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