Analyzing Exponent (NASDAQ:EXPO) and Barrett Business Services (NASDAQ:BBSI)

Exponent (NASDAQ:EXPO) and Barrett Business Services (NASDAQ:BBSI) are both industrials companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, profitability, valuation, institutional ownership and risk.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Exponent	17.67%	31.48%	15.53%
Barrett Business Services	2.77%	20.38%	5.98%

Volatility and Risk

Exponent has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500. Comparatively, Barrett Business Services has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Exponent and Barrett Business Services, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Exponent	0	2	2	0	2.50
Barrett Business Services	0	3	2	1	2.67

Exponent presently has a consensus target price of $81.00, indicating a potential upside of 20.23%. Barrett Business Services has a consensus target price of $41.00, indicating a potential upside of 21.54%. Given Barrett Business Services’ stronger consensus rating and higher possible upside, analysts plainly believe Barrett Business Services is more favorable than Exponent.

Insider & Institutional Ownership

92.4% of Exponent shares are owned by institutional investors. Comparatively, 86.8% of Barrett Business Services shares are owned by institutional investors. 1.7% of Exponent shares are owned by company insiders. Comparatively, 4.8% of Barrett Business Services shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Exponent pays an annual dividend of $1.24 per share and has a dividend yield of 1.8%. Barrett Business Services pays an annual dividend of $0.32 per share and has a dividend yield of 0.9%. Exponent pays out 55.6% of its earnings in the form of a dividend. Barrett Business Services pays out 23.5% 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. Exponent has increased its dividend for 12 consecutive years and Barrett Business Services has increased its dividend for 1 consecutive years. Exponent is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Exponent and Barrett Business Services”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Exponent	$582.01 million	5.62	$106.01 million	$2.23	30.21
Barrett Business Services	$1.27 billion	0.65	$54.45 million	$1.36	24.81

Exponent has higher earnings, but lower revenue than Barrett Business Services. Barrett Business Services is trading at a lower price-to-earnings ratio than Exponent, indicating that it is currently the more affordable of the two stocks.

Summary

Exponent beats Barrett Business Services on 10 of the 17 factors compared between the two stocks.

About Exponent

Exponent, Inc., together with its subsidiaries, operates as a science and engineering consulting company in the United States and internationally. The company operates in two segments, Engineering and Other Scientific, and Environmental and Health. The Engineering and Other Scientific segment provides services in the areas of biomechanics, biomedical engineering and sciences, buildings and structures, civil engineering, construction consulting, data sciences, electrical engineering and computer science, human factors, materials and corrosion engineering, mechanical engineering, polymer science and materials chemistry, thermal sciences, and vehicle engineering. The Environmental and Health segment offers services in the areas of chemical regulation and food safety, ecological and biological sciences, environmental and earth sciences, and health sciences. The company offers approximately 90 technical disciplines to solve pressing and complicated challenges facing stakeholders. It serves clients in chemical, construction, consumer products, energy, food, beverage and nutrition, government, life sciences, insurance, manufacturing, technology, industrial equipment, transportation, and other sectors of the economy. The company was formerly known as The Failure Group, Inc. and changed its name to Exponent, Inc. in 1998. The company was founded in 1967 and is headquartered in Menlo Park, California.

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.