Analyzing Barrett Business Services (NASDAQ:BBSI) and IBEX (NASDAQ:IBEX)

Barrett Business Services (NASDAQ:BBSI) and IBEX (NASDAQ:IBEX) are both small-cap industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, risk, profitability and valuation.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Barrett Business Services and IBEX, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Barrett Business Services	1	2	2	1	2.50
IBEX	0	2	1	0	2.33

Barrett Business Services currently has a consensus target price of $41.00, indicating a potential upside of 28.51%. IBEX has a consensus target price of $40.00, indicating a potential downside of 6.53%. Given Barrett Business Services’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Barrett Business Services is more favorable than IBEX.

Volatility & Risk

Barrett Business Services has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500. Comparatively, IBEX has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Barrett Business Services	$1.24 billion	0.62	$54.45 million	$1.36	23.46
IBEX	$644.08 million	0.88	$46.33 million	$3.13	13.67

Barrett Business Services has higher revenue and earnings than IBEX. IBEX 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Barrett Business Services	2.77%	20.95%	6.11%
IBEX	7.19%	28.96%	15.36%

Institutional & Insider Ownership

86.8% of Barrett Business Services shares are owned by institutional investors. Comparatively, 81.2% of IBEX shares are owned by institutional investors. 4.8% of Barrett Business Services shares are owned by company insiders. Comparatively, 3.4% of IBEX shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Barrett Business Services beats IBEX on 10 of the 15 factors compared between the two stocks.

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.

About IBEX

IBEX Limited provides end-to-end technology-enabled customer lifecycle experience solutions in the United States and internationally. The company products and services portfolio includes ibex Connect, that offers customer service, technical support, revenue generation, and other revenue generation outsourced back-office services through the CX model, which integrates voice, email, chat, SMS, social media, and other communication applications; ibex Digital, a customer acquisition solution that comprises digital marketing, e-commerce technology, and platform solutions; and ibex CX, a customer experience solution, which provides a suite of proprietary software tools to measure, monitor, and manage its clients' customer experience. It operates customer engagement and customer acquisition delivery centers. The company serves banking and financial services, delivery and logistics, health tech and wellness, high tech, retail and e-commerce, streaming and entertainment, travel and hospitality, and utility industries. The company was formerly known as IBEX Holdings Limited and changed its name to IBEX Limited in September 2019. IBEX Limited was incorporated in 2017 and is headquartered in Washington, District of Columbia. The company is a subsidiary of The Resource Group International Limited.