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4 Staffing Stocks to Buy on a Solid Surge in Employment

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Job vacancies are finally being filled up in the U.S. economy that saw massive job gains in February. Companies till sometime back were struggling to fill up vacancies despite a large number of openings. However, things seem to be changing now as the fiscal stimulus ended long back and people are once again getting ready to go to work.

At the same time, the unemployment rate also fell in the United States, thus indicating that the economy is on track for a speedy recovery. Given this situation, staffing firms are once again busy helping corporations recruit employees. Thus, stocks like Resources Connection, Inc. (RGP - Free Report) , DLH Holdings Corp. (DLHC - Free Report) , Kforce Inc. (KFRC - Free Report) and Robert Half International Inc. (RHI - Free Report) are likely to benefit in the near term.

Economy Adds More Jobs

The Labor Department said on Mar 4 that the U.S. economy added 678,000 jobs in February, beating analysts’ expectations of 440,000. This follows January’s gains of 467,000 jobs. February’s jump once again shows that people are finally getting back to work and corporations are busy hiring more heads.

The job markets had somewhat slowed down last year due to a surge in cases of the Omicron variant of the coronavirus that kept many away from work. However, things are finally changing and as the economy is getting back on its feet, and more jobs are being added.

Also, the government’s fiscal stimulus to fight the losses during the peak of the COVID-19 outbreak, which had given people more purchasing power during that period, is also long over and people are finally gearing up to go back to offices. This also saw the unemployment level fall to a record 3.5% to 5.4 million in February.

Signs of Economic Growth

February’s gains also mark 10 straight months of job gains. However, the pace has only picked up lately. Prior to the pandemic, employment had reached its highest point. Then came the COVID-19 outbreak, which resulted in millions of people losing their jobs and others being furloughed. The labor scarcity has persisted, despite the fact that the jobless rate has dropped to a new low.

However, February once again indicates that 2022 has started on a great note. The U.S. economy has added 7 million jobs in the past year, putting the country on track for a full recovery this summer, a little over two years after the pandemic threw the country into recession.

Moreover, annual wages have risen 5.1%. Also, jobless claims have been steadily declining for some time now. The Labor Department said on Mar 3 that initial jobless claims declined 18,000 to a seasonally adjusted 215,000 for the week ended Feb 26.

The U.S. economy presently has 11 million job openings and hiring is likely to pick up in the coming months, which will see staffing firms getting busier.

Our Choices

Given this situation, it makes for an ideal opportunity to invest in staffing stocks. We have handpicked four such sticks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Resources Connection, Inc. is a multinational professional services firm that helps business leaders execute internal initiatives. RGP provides experienced accounting and finance, human resources management and information technology professionals to clients on a project-by-project basis. Partnering with business leaders, Resources Connection drives internal change across all parts of a global enterprise such as accounting, finance, risk management and internal audit, corporate advisory, strategic communications and restructuring, information management, human capital, supply chain management, healthcare solutions, and legal and regulatory services.

Resources Connection’s expected earnings growth rate for the current year is 13.9%. The Zacks Consensus Estimate for current-year earnings has improved 14.7% over the past 60 days. Shares of RGP have gained 7.8% in the past six months. Resources Connection has a Zacks Rank #1.

DLH Holdings Corp. serves clients throughout the United States as a full-service provider of healthcare, logistics and technical support services to DoD and Federal agencies. DLHC’s healthcare delivery solutions include professional services, from case management, to health and injury assessment, critical care, medical/surgical, emergency room/trauma center, counseling, behavioral health and trauma brain injury, medical systems analysis, and medical logistics, and several allied support services. DLH Holdings’ logistics and technical services include program and project management, systems engineering and applicable information technology services, integrated logistics support, training, equipment and non-tactical vehicle operations and maintenance, and facilities and shipyard support services.

DLH Holdings’ expected earnings growth rate for the current year is 65.4%. The Zacks Consensus Estimate for current-year earnings has improved 7.2% over the past 60 days. Shares of DLHC have gained 43.4% in the past six months. DLH Holdings has a Zacks Rank #2.

Kforce Inc. and its subsidiaries provide professional staffing services and solutions to clients on a temporary as well as permanent basis through its Technology and Finance and Accounting segments. KFRC’s Tech Segment provides both Flex and Direct Hire services to clients, focusing primarily on areas of information technology such as systems/applications architecture and development, data management, business and artificial intelligence, machine learning and network architecture and security. Kforce Inc.’s FA segment provides both Flex and Direct Hire services to clients in areas such as accounting, transactional finance, financial analysis and reporting, taxation, budgeting, loan servicing, professional administration, audit services and systems and controls analysis and documentation.

Kforce’s expected earnings growth rate for the current year is 19.5%. The Zacks Consensus Estimate for current-year earnings has improved 9.9% over the past 60 days. Shares of KFRC have gained 22.8% in the past six months. Kforce has a Zacks Rank #1.

Robert Half International Inc. is one of the world's largest providers of professional consulting and staffing services. RHI is benefiting from strength in Protiviti, the company’s subsidiary through which it offers risk consulting, internal audit and information technology consulting services.Robert Half's shares outperformed its industry in the past year, partly due to consecutive earnings and revenue beats in the past four quarters. 

Robert Half's expected earnings growth rate for the current year is 16%. The Zacks Consensus Estimate for current-year earnings has improved 8.9% over the past 60 days. Shares of RHI have gained 12.9% in the past six months. Robert Half has a Zacks Rank #1.