StarTek (NYSE: SRT) and Barrett Business Services (NASDAQ:BBSI) are both small-cap business services companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.
Institutional and Insider Ownership
37.5% of StarTek shares are owned by institutional investors. Comparatively, 79.2% of Barrett Business Services shares are owned by institutional investors. 17.8% of StarTek shares are owned by company insiders. Comparatively, 6.6% of Barrett Business Services shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Earnings & Valuation
This table compares StarTek and Barrett Business Services’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|StarTek||$292.60 million||0.34||-$1.27 million||($0.08)||-77.75|
|Barrett Business Services||$920.43 million||0.75||$25.17 million||$3.33||28.28|
Barrett Business Services has higher revenue and earnings than StarTek. StarTek 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.
This table compares StarTek and Barrett Business Services’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Barrett Business Services||2.92%||34.88%||4.13%|
Volatility and Risk
StarTek has a beta of 0.21, suggesting that its stock price is 79% less volatile than the S&P 500. Comparatively, Barrett Business Services has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500.
This is a breakdown of recent ratings for StarTek and Barrett Business Services, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Barrett Business Services||0||0||1||0||3.00|
StarTek currently has a consensus target price of $12.67, indicating a potential upside of 103.64%. Barrett Business Services has a consensus target price of $100.00, indicating a potential upside of 6.18%. Given StarTek’s higher probable upside, analysts plainly believe StarTek is more favorable than Barrett Business Services.
Barrett Business Services pays an annual dividend of $1.00 per share and has a dividend yield of 1.1%. StarTek does not pay a dividend. Barrett Business Services pays out 30.0% of its earnings in the form of a dividend.
Barrett Business Services beats StarTek on 12 of the 15 factors compared between the two stocks.
StarTek Company Profile
StarTek, Inc. provides business process outsourcing services in the United States, Canada, Honduras, Jamaica, and the Philippines. It operates in three segments: Domestic, Nearshore, and Offshore. The company's service offerings include customer care, sales support, inbound sales, complex order processing, accounts receivable management, technical and product support, up-sell and cross-sell opportunities, customer intelligence analytics, and other industry-specific processes. It offers technical and product support services through telephone, e-mail, chat, facsimile, and Internet; and sales support services comprising lead generation, direct sales, account management and retention programs, and marketing analysis and modeling. The company's provisioning and order processing services comprise full life cycle order management and technical sales support for high-end telecommunications services, such as wire-line, wireless, data, and customer premise equipment; order fallout from its clients' automated systems, billing review, revenue recovery, and quality assurance; direct-to-consumer services, such as provisioning, order processing, and transfer of accounts between client service providers. Its receivables management services consist of first and third party collections services for clients in the telecommunication, cable and media, and healthcare industries; healthcare services include customer care, sales support, accounts receivable management, remote patient care, and medical triage to providers, payers, pharmaceutical, and medical devices; and industry-specific processes comprise training curriculum development, workforce management, customer analytics, quality monitoring services, and dispositions. The company was founded in 1987 and is headquartered in Greenwood Village, Colorado.
Barrett Business Services Company Profile
Barrett Business Services, Inc. provides business management solutions for small and medium-sized companies in the United States. The company has 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 certain other administration functions for the client's existing workforce. The company also provides staffing and recruiting services, such as on-demand or short-term staffing assignments, contract staffing, direct placement, long-term or indefinite-term on-site management. It serves electronics manufacturers, various light-manufacturing industries, agriculture-based companies, transportation and shipping enterprises, food processors, telecommunications companies, public utilities, general contractors in various construction-related fields, and professional services firms. Barrett Business Services, Inc. was founded in 1965 and is headquartered in Vancouver, Washington.
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