Top 11 Staffing & Employment Services Stocks
Marvin's rules picked 11 staffing and employment services stocks. Paychex, Korn Ferry and Upwork have the highest overall scores. Scores compare each company only with others in its own industry.
Staffing and employment services companies help businesses find, hire, place and pay workers. This list covers 11 of them that Marvin's rules selected, starting with the highest overall score. Paychex, Korn Ferry and Upwork are at the top.
Results in this industry vary a lot. Some companies here have wide profit margins, while others keep only a thin slice of each sales dollar. Several posted a decline in revenue growth in their last fiscal year, and a few carry a lot of debt compared with their equity.
Keep in mind that a high score is not a promise about the future. It only shows how a company compares with other companies in the same industry today. Where a figure is missing for a stock, the blurb says so.
The list
How Marvin ranked these stocks
Marvin included companies above a minimum size and ranked them by Marvin scores, which run from zero to one hundred. The list covers the Staffing & Employment Services industry, with the highest Overall score first. Every score is relative to each company's own industry, so a high score means a company looks strong next to its staffing peers, not next to every stock in the market.
Companies above about $300 million in size, ranked by Marvin scores (0-100, relative to each company's own industry). The Staffing & Employment Services industry, highest Overall score first.
The stocks, one by one
Paychex, Inc. PAYX
Paychex has the top overall score at 95. Its operating margin of 39.2% and free cash flow margin of 30.5% point to strong profitability. Revenue growth last year was 16.9%. Caution: debt-to-equity of 1.25 is higher than several peers on this list.
Korn Ferry KFY
Korn Ferry scores 89 overall, helped by an opportunity score of 94. Debt-to-equity of 0.30 is low, and revenue grew 6.4% last year, a modest pace. Caution: its operating margin of 12.9% is only moderate, and gross margin data is not available.
Upwork Inc. UPWK
Upwork has an overall score of 78 and a strong free cash flow margin of 26.0%. Its gross margin of 77.2% is also high. Caution: revenue growth was only 2.4%, and its opportunity score of 27 is low.
Barrett Business Services, Inc. BBSI
Barrett Business Services scores 73 overall. Revenue growth of 8.4% and return on equity of 17.2% look healthy. Caution: its operating margin of 4.1% and free cash flow margin of 1.2% are thin, and debt data is not available.
TriNet Group, Inc. TNET
TriNet has an overall score of 68 and a free cash flow margin of 5.9%. Its return on equity of 140.0% looks very high. Caution: debt-to-equity of 7.60 is heavy, revenue growth was -0.9%, and operating margin is not available.
ManpowerGroup Inc. MAN
ManpowerGroup scores 63 overall, with a high opportunity score of 89 but a quality score of just 51. Caution: its operating margin of 1.5% is very thin, and revenue growth was only 0.6%.
Kforce Inc. KFRC
Kforce has an overall score of 58 and a return on equity of 29.5%, which is solid. Its operating margin is 4.0%. Caution: revenue growth was -5.4%, meaning sales shrank, and debt data is not available.
Robert Half Inc. RHI
Robert Half scores 52 overall and has a gross margin of 36.8%. Caution: revenue growth was -7.2%, a decline, and its operating margin of 0.2% leaves almost no profit after costs. Debt data is not available.
Kelly Services, Inc. KELYA
Kelly Services has an overall score of 47 and low debt, with debt-to-equity of 0.13. Caution: its operating margin of -2.3% and return on equity of -27.8% are both negative, which means the company is losing money by those measures.
ZipRecruiter, Inc. ZIP
ZipRecruiter scores 41 overall and has a very high gross margin of 89.1%. Caution: its operating margin of 0.3% is close to zero, revenue growth was -5.3%, and return on equity and debt figures are not available.
Insperity, Inc. NSP
Insperity has the lowest overall score here at 36, with a quality score of 15 but an opportunity score of 78. Revenue growth was 3.5%. Caution: operating margin is -0.0% and debt-to-equity is 7.84, which is high.
Common questions
What do staffing and employment services companies do?
They help employers find and hire people. Some place temporary or permanent workers, some run online marketplaces that connect employers with job seekers or freelancers, and some handle payroll and related services for other businesses.
Why are the margins so thin for many of these stocks?
Traditional staffing firms often pay workers' wages out of the money they bill clients, so a large share of revenue goes straight to costs. That leaves a small share as profit, which is why gross and operating margins tend to be lower than at software-style businesses.
What does a high debt-to-equity ratio mean?
It compares what a company owes with the value of its shareholders' stake. A higher ratio means the company relies more on borrowed money, which can add risk if earnings weaken. A low ratio means it relies less on debt.
Keep reading
- Top 15 Industrials Stocks Ranked by Marvin Opportunity Score
- Top 15 Industrials Companies With the Strongest Businesses
- Top 15 Industrials Stocks Ranked by Marvin Scores
- Top 20 Dividend Stocks Ranked by Marvin's Scores
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Marvin's scores (0-100) compare each company with others in its industry today. Growth and margin figures come from SEC filings. This is general information, not personal investment advice or a recommendation to buy or sell anything. Do your own research.