Recruit (RCRUY) & Its Competitors Critical Analysis

Recruit (OTCMKTS:RCRUY) is one of 204 publicly-traded companies in the “Professional Services” industry, but how does it weigh in compared to its rivals? We will compare Recruit to related businesses based on the strength of its dividends, earnings, profitability, valuation, analyst recommendations, risk and institutional ownership.

Risk and Volatility

Recruit has a beta of 1.7, indicating that its share price is 70% more volatile than the S&P 500. Comparatively, Recruit’s rivals have a beta of 0.95, indicating that their average share price is 5% less volatile than the S&P 500.

Profitability

This table compares Recruit and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Recruit	14.94%	36.40%	21.05%
Recruit Competitors	-0.52%	19.38%	4.25%

Earnings & Valuation

This table compares Recruit and its rivals gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Recruit	$24.56 billion	$3.28 billion	41.23
Recruit Competitors	$3.36 billion	$228.41 million	27.80

Recruit has higher revenue and earnings than its rivals. Recruit is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a summary of recent recommendations and price targets for Recruit and its rivals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Recruit	0	1	0	0	2.00
Recruit Competitors	1489	6297	9062	484	2.49

As a group, “Professional Services” companies have a potential upside of 33.76%. Given Recruit’s rivals stronger consensus rating and higher possible upside, analysts plainly believe Recruit has less favorable growth aspects than its rivals.

Insider and Institutional Ownership

57.3% of shares of all “Professional Services” companies are owned by institutional investors. 17.1% of shares of all “Professional Services” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Recruit pays an annual dividend of $0.02 per share and has a dividend yield of 0.1%. Recruit pays out 3.8% of its earnings in the form of a dividend. As a group, “Professional Services” companies pay a dividend yield of 2.6% and pay out -160.0% of their earnings in the form of a dividend. Recruit lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Summary

Recruit rivals beat Recruit on 8 of the 15 factors compared.

About Recruit

Recruit Holdings Co., Ltd. provides HR technology and business solutions that transforms the world of work. It operates through three segments: HR Technology, Matching & Solutions, and Staffing. The HR Technology segment provides various technological solutions that help job seekers and employers in navigating hiring and recruitment. The Matching & Solutions segment offers HR solutions that support business clients’ recruiting and hiring activities and individual users’ job search activities through its job advertising services and placement services. This segment also provides marketing solutions that provide matching platforms for businesses in various industries, including housing and real estate, beauty, bridal, travel, dining, and others, as well as SaaS solutions, which are business and management support tools for small and medium-sized companies. The Staffing segment provides temporary staffing services in Japan, Europe, the United States, and Australia. Recruit Holdings Co., Ltd. operates in more than 60 countries. The company was formerly known as Recruit Co., Ltd. and changed its name to Recruit Holdings Co., Ltd. in October 2012. Recruit Holdings Co., Ltd. was founded in 1960 and is headquartered in Tokyo, Japan.