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

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Robert Half International Inc. (RHI - Free Report) carries an impressive Growth Score of A. 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’s next five-year earnings growth is pegged at 7.1%. Earnings for 2019 and 2020 are expected to grow 8.3% and 5.9%, respectively.

Robert Half’s shares have gained 23.1% over the past year, outperforming the 16.4% growth of the industry it belongs to.

Factors Aiding the Stock

The staffing industry is currently in good shape, benefiting from economic strength and stability, and strong service activities. So, there is plenty of room for Robert Half’s growth in the United States in the near to mid-term. Tight labor markets globally continue to keep strong demand for the company’s staffing services.

Protiviti, the company’s subsidiary through which it offers risk consulting, internal audit and information technology consulting services, is strongly positioned in the market and currently a double-digit margin and revenue performer.

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

Some Risks

Despite riding on significant growth prospects, Robert Half is not free from headwinds. The company is witnessing escalation in costs as it is making huge investments in software and technology, while being embroiled in legal matters and proceedings.

Zacks Rank & Stocks to Consider

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

Some better-ranked stocks in the broader Zacks Business Services sector are Advanced Disposal Services ADSW, The Western Union Company WU and Accenture ACN. While Advanced Disposal and Western Union sport a Zacks Rank #1 (Strong Buy), Accenture carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term expected EPS (three to five years) growth rate for Advanced Disposal, Western Union and Accenture is 10%, 12.3% and 10.3%, respectively.

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