Here's Why Investors Should Retain Insperity (NSP) Stock Now
Insperity, Inc. NSP is benefiting from its consistent efforts to reward shareholders and solid liquidity.
The company has a long-term expected earnings growth rate of 15%.
Factors Favoring NSP
Insperity looks strong on the back of a growing professional employer organization (“PEO”) industry. PEO industry is currently being driven by growth of small and medium-sized businesses, increased need of providing employee benefits, raised costs related to workers’ compensation insurance coverage, workplace safety programs, employee-related complaints and litigation, complex regulation of payroll, and payroll tax and employment issues. Related costs of compliance, expenses, time and knowledge required to attain technology infrastructure to administer benefits, HR and payroll processing on an integrated basis are other tailwinds.
Insperity reported current ratio of 1.2 at the end of second-quarter 2023, higher than 1.13 at the end of prior-year quarter. Increasing current ratio is desirable as it indicates that the risk of default is less.
Insperity puts consistent efforts to reward its shareholders. During the second quarter, NSP repurchased almost 289,000 shares for $35 million and paid out $20 million as cash dividends. Capital expenditures totaled $7.2 million. Such moves indicate NSP’s commitment toward boosting shareholders’ value and underlining its confidence in business.
Key Risks
The company is seeing a rise in expenses as it continues to invest in growth, technology, and product and service offerings. Operating expenses jumped 9% year over year to $208.8 million during second-quarter 2023. Operating expenses per worksite employee per month inched up 1.8% to $224. Hence, the bottom line is likely to remain under pressure going forward.
Zacks Rank
NSP currently carries Zacks Rank #3 (Hold).
Key Picks
Some better-ranked stocks in the Zacks Business Services sector are:
Aptiv APTV carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings and revenues for 2023 are expected to grow 39% and 14.8% from the year-ago figure. APTV had an impressive earnings surprise of 13.35%, on average, having beaten the Zacks Consensus Estimate in all the four trailing quarters. APTV carries a VGM Score of A.
Clean Harbors CLH has a Zacks Rank of 2. Earnings for 2023 are suggested to be in line with the year-ago quarter. Revenues are anticipated to improve 5.3% year over year.
CLH had an impressive earnings surprise of 13%, on average, having outpaced the Zacks Consensus Estimate in each of the trailing four quarters. CLH carries a VGM Score of B.
Verisk Analytics VRSK carries a Zacks Rank of 2. Earnings for 2023 are projected to grow 14%. Revenues for 2023 are forecast to fall 8.3% from the year-ago figure.
VRSK had an impressive earnings surprise of 9.85%, on average, having outshined the Zacks Consensus Estimate in three of the four trailing quarters and matching on one instance.
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Insperity, Inc. (NSP) : Free Stock Analysis Report
Clean Harbors, Inc. (CLH) : Free Stock Analysis Report
Verisk Analytics, Inc. (VRSK) : Free Stock Analysis Report
Aptiv PLC (APTV) : Free Stock Analysis Report
