Staffing industry has gained 7% over the past year, outperforming the S&P 500 Index’s 6.1% appreciation. The broader Zacks Business Services sector has however declined 52.6% in the said time frame. Image Source: Zacks Investment Research
The staffing industry stands to benefit from the gradual resumption of business activities, which were postponed or restricted due to the coronavirus-induced strict lockdowns across the globe.
The industry is a major beneficiary of manufacturing and service activities, which, in turn, are dependent on economic health. Notably, the Institute for Supply Management measured that both Manufacturing PMI and Services PMI clocked the 21
st consecutive month of expansion in February. Meanwhile, a steady economic recovery is evident from the fourth-quarter 2021 GDP number, which, according to the "second" estimate released by the Bureau of Economic Analysis, increased at an annual rate of 7%, higher than the 2.3% growth witnessed in third-quarter 2021.
This gradually recovering U.S. economy, backed by upbeat manufacturing and service activities, has led to additional hiring and wage increase.
Notably, the U.S. economy added 678,000 jobs in February, higher than 481,000 in January and 588,000 in December. The unemployment rate also came down to 3.8% from 4% in January and 3.9% in December. Substantial job gains have been witnessed in leisure and hospitality, professional and business services, health care, and construction.
Average hourly earnings in February increased 1 cent to $31.58, registering a 5.1% year-over-year increase. The average workweek rose by 0.1 hour to 34.7 hours. Average weekly earnings grew 0.3% to $1,095.83, registering a 5.4% year-over-year increase.
Kforce, Inc.( KFRC Quick Quote KFRC - Free Report) , Robert Half International Inc. ( RHI Quick Quote RHI - Free Report) and Korn Ferry ( KFY Quick Quote KFY - Free Report) are some of the stocks that are likely to gain from the abovementioned favorable industry trends. 3 Staffing Stocks to Bet on
Adding stocks from the industry looks like a smart move to enhance your portfolio. The buoyancy in the industry is further confirmed by its
Zacks Industry Rank #47, which places it in the top 19% of more than 250 Zacks industries.
Here we present three promising top-ranked staffing stocks, which have a solid expected earnings growth rate for the current year, witnessed upward estimate revisions in the past 90 days and have a strong trailing four-quarter average earnings surprise history. You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Kforce: This Zacks Rank #1 Florida-based company provides professional staffing services and solutions in the United States and internationally.
Kforce’s technology staffing and solutions business has helped it stay competitive amid these challenging times. The rising demand for technology solutions has enabled Kforce to increase investments in the cloud-based, technology-enabled operating model. This is expected to supplement the company’s growth amid coronavirus-induced dependency on technology. Apart from this, the company is anticipated to benefit from modifications in its business model and reduction of operating costs.
The Zacks Consensus Estimate for Kforce’s 2022 EPS has moved up 9.9% in the past 90 days. Its expected earnings growth rate for the current year is 19.5%. Kforce has a trailing four-quarter earnings surprise of 4.7%, on average.
Kforce stock has gained 24.8% over the past year.
Robert Half: This Zacks Rank #2 (Buy) California-based company provides staffing and risk consulting services in North America, South America, Europe, Asia, and Australia.
Robert Half is witnessing demand for its staffing and business consulting services, amid the economic crisis resulting from the COVID-19 pandemic. The company’s wholly-owned subsidiary, Protiviti continues to benefit from solid solutions offerings and pipeline. Robert Half has been utilizing a major share of its capital expenditures on investments in software initiatives and technology infrastructure. This should aid the company’s growth prospects amid coronavirus-induced dependency on technology. Robert Half’s solid balance sheet is a major positive. Consistency in rewarding shareholders through share repurchases boost investor confidence and positively impact earnings per share.
The Zacks Consensus Estimate for RHI’s 2022 EPS has improved 8.6% in the past 90 days. Its expected earnings growth rate for the current year is 15.7%. Robert Half has a trailing four-quarter earnings surprise of 19.5%, on average.
Robert Half stock has gained 40.3% over the past year.
Korn Ferry: This Zacks Rank #2 California-based company provides organizational consulting services worldwide.
Korn Ferry continues to benefit from its business model, which is highly diversified in terms of geography, segment and industry. Revenue growth, operational efficiencies and reduction in expenses have been aiding the bottom line. The company’s solid cash position allows it to pursue strategic acquisitions, invest in growth initiatives and return cash through regular quarterly dividend payments and share repurchases.
The Zacks Consensus Estimate for Korn Ferry’s 2022 EPS has moved up 5.5% in the past 90 days. Its expected earnings growth rate for the current year is more than 100%. Korn Ferry has a trailing four-quarter earnings surprise of 17.7%, on average.