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Here's Why You Should Hold on to Robert Half (RHI) Stock

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A prudent investment decision involves buying stocks that have solid prospects and selling those that carry risks. At times, it is rational to hold certain stocks that have enough potential but are weighed down by tough market conditions.

We believe that Robert Half International Inc. (RHI - Free Report) , with expected long-term earnings per share growth rate of 7.8% and a market cap of $6.5 billion, is a stock that investors should retain in their portfolios.

Factors that Bode Well

With manufacturing and non-manufacturing activities remaining in good shape and driven by economic strength, Robert Half continues to witness revenue growth across its U.S. operations. In the last reported quarter, U.S. staffing revenues of $965 million increased 3.8% on a reported basis and 4.1% on an adjusted basis. Tight labor markets continue to keep strong demand for the company’s professional staffing services.

Robert Half International Inc. Revenue (TTM)

 

Protiviti, the company’s subsidiary through which it offers risk consulting, internal audit and information technology consulting services, is strongly positioned in both U.S. and non-U.S. regions and is currently a double-digit margin and revenue performer. Protiviti revenues were $273 million in the last reported quarter, which increased 16.6% year over year on a reported basis and 13.8% on an adjusted basis. Operating margin of 10.6% improved 270 basis points year over year.

Robert Half utilizes a major share of its capital expenditures on investments in technology. This, along with broad and deep client as well as candidate database, and network scope and global scale are likely to drive long-term growth for the company.

Zacks Rank and Stocks to Consider

Robert Half currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the broader Zacks Business Services sector include ICF International (ICFI - Free Report) , Charles River Associates (CRAI - Free Report) and Visa (V - Free Report) , each carrying a Zacks Rank #2 (Buy).

The long-term expected EPS (three to five years) growth rate for ICF, Charles River and Visa is 13%, 13% and 16.6%, respectively.

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