Head-To-Head Comparison: Barrett Business Services (NASDAQ:BBSI) versus Thomson Reuters (NASDAQ:TRI)

Thomson Reuters (NASDAQ:TRI) and Barrett Business Services (NASDAQ:BBSI) are both industrials companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, dividends, profitability, institutional ownership and valuation.

Risk & Volatility

Thomson Reuters has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, Barrett Business Services has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500.

Institutional and Insider Ownership

17.3% of Thomson Reuters shares are held by institutional investors. Comparatively, 86.8% of Barrett Business Services shares are held by institutional investors. 4.8% of Barrett Business Services shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Thomson Reuters pays an annual dividend of $2.62 per share and has a dividend yield of 2.7%. Barrett Business Services pays an annual dividend of $0.32 per share and has a dividend yield of 1.0%. Thomson Reuters pays out 69.7% of its earnings in the form of a dividend. Barrett Business Services pays out 23.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Barrett Business Services has raised its dividend for 1 consecutive years.

Valuation & Earnings

This table compares Thomson Reuters and Barrett Business Services”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Thomson Reuters	$7.48 billion	5.71	$1.50 billion	$3.76	26.18
Barrett Business Services	$1.24 billion	0.64	$54.45 million	$1.36	23.98

Thomson Reuters has higher revenue and earnings than Barrett Business Services. Barrett Business Services is trading at a lower price-to-earnings ratio than Thomson Reuters, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Thomson Reuters and Barrett Business Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Thomson Reuters	21.22%	15.82%	10.27%
Barrett Business Services	2.77%	20.95%	6.11%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Thomson Reuters and Barrett Business Services, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Thomson Reuters	0	6	10	1	2.71
Barrett Business Services	1	2	2	1	2.50

Thomson Reuters currently has a consensus target price of $131.57, indicating a potential upside of 33.64%. Barrett Business Services has a consensus target price of $41.00, indicating a potential upside of 25.73%. Given Thomson Reuters’ stronger consensus rating and higher possible upside, equities analysts plainly believe Thomson Reuters is more favorable than Barrett Business Services.

Summary

Thomson Reuters beats Barrett Business Services on 11 of the 17 factors compared between the two stocks.

About Thomson Reuters

Thomson Reuters Corporation provides business information services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates in five segments: Legal Professionals, Corporates, Tax & Accounting Professionals, Reuters News, and Global Print. The Legal Professionals segment offers research and workflow products focusing on legal research and integrated legal workflow solutions that combine content, tools, and analytics to law firms and governments. The Corporates segment provides a suite of content-enabled technology solutions for legal, tax, regulatory, compliance, and IT professionals. The Tax & Accounting Professionals segment offers research and workflow products focusing on tax offerings and automating tax workflows to tax, accounting, and audit professionals in accounting firms. The Reuters News segment provides business, financial, and international news to media organizations, professional, and news consumers through news agency and industry events. The Global Print segment offers legal and tax information primarily in print format to legal and tax professionals, governments, law schools, and corporations. The company was formerly known as The Thomson Corporation and changed its name to Thomson Reuters Corporation in April 2008. The company was founded in 1851 and is headquartered in Toronto, Canada. Thomson Reuters Corporation is a subsidiary of The Woodbridge Company Limited.

About Barrett Business Services

Barrett Business Services, Inc. provides business management solutions for small and mid-sized companies in the United States. The company develops a management platform that integrates a knowledge-based approach from the management consulting industry with tools from the human resource outsourcing industry. It offers professional employer services under which it enters into a client services agreement to establish a co-employment relationship with each client company, assuming responsibility for payroll, payroll taxes, workers compensation coverage, and other administration functions for the client’s existing workforce. The company provides staffing and recruiting services, such as on-demand or short-term staffing assignment, contract staffing, direct placement, and long-term or indefinite-term on-site management services. It serves electronics manufacturers, light-manufacturing industries, agriculture-based companies, transportation and shipping enterprises, food processors, telecommunications companies, public utilities, general contractors in various construction-related fields, restaurant franchises, and professional services firms. Barrett Business Services, Inc. was incorporated in 1965 and is headquartered in Vancouver, Washington.