Robert Half Inc.’s RHI wholly-owned subsidiary, Protiviti, has witnessed a consistent rise in revenues in the past quarters, boosting the company’s top line. RHI is popular among dividend-seeking investors. A strong liquidity position makes it appealing. Meanwhile, the company operates in a highly competitive environment, and declining EBITDA suggests weak operational performance.
The stock has gained 5.6% in the past six months against the 8.2% decline of the industry it belongs to. It has also outperformed 4.1% growth of the Zacks S&P 500 composite.
Six Months Price Performance
Image Source: Zacks Investment Research
Factors That Auger Well for RHI’s Success
Protiviti is in great shape, offering risk consulting, internal audit and information technology consulting services. With a focus on technology consulting, cloud computing and digital transformation, Protiviti is well-positioned in the market, resulting in double-digit margin and revenue performance.
In the first quarter of 2024, Protiviti’s revenues rose marginally, and the same grew 4.8% and 5.1% in the second and third quarters, respectively. It was driven by the rise in billable hours worked by consultants on client engagements and average hourly bill rates. We anticipate its revenues to rise 3.8% in the fourth quarter of 2024.
Robert Half puts consistent efforts into rewarding its shareholders through consistent dividend payments. The consistency has persisted despite fluctuations in RHI’s cash position, underscoring its dedication to creating long-term value for investors. In 2021, 2022 and 2023, the company returned $170.61 million, $189.29 million and $205.91 million in dividends, respectively.
RHI repurchased shares worth $287.74 million, $319.9 million and $254.63 million in 2021, 2022 and 2023, respectively. These moves instill confidence among shareholders and establish the company’s commitment to return value to its shareholders.
Robert Half’s current ratio (a measure of liquidity) in the third quarter of 2024 was 1.72, which was higher than the industry average of 1.46. Despite a 5.5% decline from the year-ago quarter due to a fall in cash and cash equivalents, a current ratio of more than 1 implies that the company might be able to pay off short-term debt efficiently.
Risks Faced by Robert Half
In the first quarter of 2024, EBITDA decreased 60% year over year. The same declined 29.8% and 50% in the second and third quarters, respectively. The decline in the metric suggests a weak operational performance. We anticipate EBITDA to mark a 7.2% fall in the fourth quarter of 2024 and an overall decline of 40.2% in 2024.
The staffing business is competitive, and Robert Half is pressured by the intense competition to continually innovate and differentiate its offerings while managing its costs. The need to invest in technology and talent to stay ahead of rivals strains the company’s resources, increasing difficulty in balancing growth and profitability.
RHI’s Zacks Rank & Stocks to Consider
Robert Half carries a Zacks Rank #3 (Hold) at present.
Some better-ranked stocks from the broader Zacks Business Services sector are Fiserv FI and Paychex PAYX, each carrying a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fiserv has a long-term earnings growth expectation of 14.9%. FI delivered a trailing four-quarter earnings surprise of 3.1%, on average.
Paychex has a long-term earnings growth expectation of 7.3%. PAYX delivered a trailing four-quarter earnings surprise of 1.7%, on average.
Free Today: Profiting from The Future’s Brightest Energy Source
The demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.
Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. This aggressive transition could mean tremendous profits for nuclear-related stocks – and investors who get in on the action early enough.
Our urgent report, Atomic Opportunity: Nuclear Energy's Comeback, explores the key players and technologies driving this opportunity, including 3 standout stocks poised to benefit the most.
Download Atomic Opportunity: Nuclear Energy's Comeback free today.Paychex, Inc. (PAYX) : Free Stock Analysis Report
Robert Half Inc. (RHI) : Free Stock Analysis Report
Fiserv, Inc. (FI) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
