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Here's Why You Should Retain Robert Half (RHI) Stock Now

Zacks Equity Research
·3 min read

Robert Half International Inc. RHI carries an impressive Growth Score of B. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of the quality and sustainability of its growth.

The company has a market capitalization of 6.1 billion. Its next five-year earnings growth is pegged at 2.7%. These factors indicate that investors should hold this stock in their portfolio.

Aiding Factors

Robert Half is benefiting from strong market position of Protiviti, the company’s subsidiary through which it offers risk consulting, internal audit and information technology consulting services. Protiviti is currently a double-digit margin and revenue performer. Its revenues increased 16.5% year over year in the first quarter of 2020 and gross margin came in at 26.3%.

Robert Half International Inc. Revenue (TTM)

Robert Half International Inc. Revenue (TTM)
Robert Half International Inc. Revenue (TTM)

Robert Half International Inc. revenue-ttm | Robert Half International Inc. Quote

To combat the COVID-19 pandemic, Protiviti recently announced that it has launched a complimentary assessment tool aimed at enabling companies address coronavirus-associated business disruptions and related workforce re-entry and business transformation challenges.

Although many companies across diverse sectors have suspended dividend payouts amid the coronavirus crisis, Robert Half remains one of those few that are sailing through the tough economic time and maintaining dividend payouts. On Apr 30, the company announced a quarterly cash dividend of 34 cents payable on Jun 15 to shareholders as of record May 26.Robert Halfhas a track record of consistent dividend payment. The company paid $146 million, $136 million and $121 million in dividends respectively in 2019, 2018 and 2017.

Risk Associated

Robert Half has a debt-laden balance sheet. Total debt at the end of first-quarter 2020 was $277 million, more than $274 million at the end of the prior quarter. The debt-to-capital ratio of 0.20 is higher than the previous quarter’s 0.19. An increase in debt-to-capitalization ratio indicates higher risk of insolvency in challenging times.

Further, the company’s cash and cash equivalent of $250 million at the end of the first quarter was below this debt level, underscoring that the company doesn’t have enough cash to meet this debt burden. However, the cash level can meet the short-term debt of $72 million.

Zacks Rank and Stocks to Consider

Robert Half currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader Zacks Business Services sector are Elastic N.V. ESTC, SailPoint Technologies Holdings, Inc. SAIL and DocuSign, Inc. DOCU, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings (three to five years) growth rate for Elastic, SailPoint Technologies and DocuSign is estimated at 26%, 15% and 31.2%, respectively.

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Robert Half International Inc. (RHI) : Free Stock Analysis Report
 
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DocuSign Inc. (DOCU) : Free Stock Analysis Report
 
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Zacks Investment Research