According to the Staffing Industry Analysts (SIA), the staffing industry in 2022 is more resilient, more automated, more efficient, and is facing more demand than the pre-pandemic year of 2019. U.S. Bureau of Labor Statistics (BLS) reported an increase in total nonfarm employment of 467,000 in January, surpassing expectations of a 125,000 gain. Moreover, the labor participation rate surged to 62.2%, up 30 basis points from the prior month.

Also, job openings came to nearly 11 million in December, more than 4.6 million above the total unemployment level. Higher job additions should increase staffing requirements across industries, benefiting the staffing and employment services companies. Industrial staffing revenue is projected to grow 8% in 2022 to reach a record $36.70 billion.

Given this backdrop, the dip in the fundamentally sound staffing stocks Robert Half International Inc. (RHI), ASGN Incorporated (ASGN), ManpowerGroup Inc. (MAN), ZipRecruiter, Inc. (ZIP) could be the right investment opportunity.

Robert Half International Inc. (RHI)

RHI is a provider of staffing and risk consulting services worldwide. The company operates through three segments: Temporary and Consultant Staffing; Permanent Placement Staffing; and Risk Consulting and Internal Audit Services.

On November 16, RHI subsidiary Protiviti announced the launch of VISION by Protiviti, a provocative thought-leadership series that puts megatrends under the microscope to provide strategic insights for C-suite executives and board members. This might prove to be beneficial for RHI.

On November 12, RHI announced that Protiviti had leased office space in the Northmark I office building in Blue Ash, Ohio, for its new Americas Delivery Center (ADC), planning to create 450 new jobs in this location over the next four to five years. Cory Gunderson, an Executive Vice-President and leader of global solutions for Protiviti, said, “We’re excited to be an employer of choice and hire local folks to help serve our global client base.”

RHI’s service revenues increased 35.7% year-over-year to $1.77 billion in the fiscal fourth quarter ended December 31. Its gross margin grew 44.7% from the year-ago value to $744.12 million, while its net income improved 77.9% year-over-year to $167.94 million. Its EPS increased 79.8% from the prior-year quarter to $1.51.  

Street expects the company’s revenue to increase 28.9% year-over-year to $1.80 billion in the fiscal first quarter ending March 2022. The consensus EPS estimate of $1.45 indicates a rise of 48.1% year-over-year in the same period. Also, RHI beat Street EPS estimates in each of the trailing four quarters, which is impressive.

The stock has increased 13.2% over the past month and 1.5% intraday to close its last trading session at $124.53. The stock is currently trading 1% below its 52-week high of $125.77.

RHI’s POWR Ratings reflect this promising outlook. The company has an overall rating of a B, which translates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree. 

RHI is rated an A in Quality. Within the A-rated Outsourcing – Staffing Services industry, it is ranked #7 of 20 stocks. 

In addition to the POWR Ratings grades highlighted, one can see the RHI’s Growth, Value, Momentum, Stability, and Sentiment ratings here. 

ASGN Incorporated (ASGN)

ASGN provides professional staffing and I.T. solutions in the technology, digital, creative, engineering, and life sciences fields across commercial and government sectors worldwide. The company operates through three segments: Apex; Oxford; and ECS.

In December 2021, ECS, a federal government segment of ASGN, is selected as an authorized reseller of U.S. Air Force (USAF) Platform One (P1) products and services, whereby it is expected to implement P1 products including Big Bang and Iron Bank for enterprises across the federal, commercial, and academic sectors. “We are thrilled by the opportunity to implement Platform One products and contribute to the Air Force mission by enhancing the base offerings of Platform One and providing value-added solutions,” said Stephen Erickson, ECS Vice-President of strategic solutions. 

ASGN’s revenues increased 17% year-over-year to $1.05 billion in the fiscal fourth quarter ended December 31. Its operating income grew 29.2% from the year-ago value to $95.50 million, while its adjusted net income improved 31.4% year-over-year to $82.10 million. Its adjusted net income per share increased 32.5% from its year-ago value to $1.55.

The consensus revenue estimate of $1.03 billion for the fiscal first quarter ending March 2022 indicates an increase of 0.8% year-over-year. The consensus EPS estimate of $0.97 reflects a rise of 7% year-over-year in the same period. ASGN has an impressive surprise earnings history, as it has topped the consensus EPS estimates in each of the trailing four quarters. 

ASGN shares have gained 26.4% over the past year but declined 4.7% year-to-date to close the last trading session at $117.62. The stock is currently trading 10.8% below its 52-week high of $131.89.

ASGN has an overall rating of B, which translates to Buy in our proprietary rating system. The stock is rated a B in Stability and Sentiment. In the Outsourcing – Staffing Services industry, it is ranked #6. To get ASGN’s Growth, Value, Momentum, and Quality ratings, click here.

ManpowerGroup Inc. (MAN)

MAN is a global provider of workforce solutions and services. The company offers permanent, temporary, and contract recruitment of professionals and administrative and industrial positions under the Manpower and Experis brands.

In November 2021, MAN declared a semi-annual dividend of $1.26 per share.

Earlier in November, MAN announced that it had been validated by the Science Based Targets initiative (SBTi) to cut greenhouse gas emissions and create a sustainable environment. The company set the target to reduce operational emissions (Scope 1 & 2) by 60% and supply chain emissions (Scope 3) by 30% by 2030. This aligns with the company’s sustainability and emission control goals.

MAN’s revenues from services increased 6.5% year-over-year to $5.38 billion in the fiscal fourth quarter ended December 31. Operating profit grew 20.5% from the year-ago value to $166.60 million. Net earnings improved 45.8% year-over-year to $111.10 million, while its net EPS increased 51.9% from its year-ago value to $2.02.

The consensus revenue estimate of $5.09 billion for the fiscal first quarter ending March 2022 indicates an increase of 3.3% year-over-year. Analysts expect EPS for the same period to come in at $1.60, reflecting a rise of 44.3% year-over-year. Moreover, MAN has beaten Street EPS estimates in three of the trailing four quarters.

Over the past year, the stock has gained 18.6% to close its last trading session at $111.27. However, it has slumped 5.7% over the past six months. The stock is currently trading 11% below its 52-week high of $125.07.

According to the POWR Ratings, MAN is rated an A in Value. It is ranked #16 in the same industry. Click here to see the MAN’s ratings for Growth, Momentum, Stability, Sentiment, and Quality.

ZipRecruiter, Inc. (ZIP)

ZIP operates as an online employment marketplace that connects job seekers and employers. The platform provides various solutions, such as job postings, online interviews, job alerts, match scores, and application updates. The company went public on the New York Stock Exchange on May 26, 2021.  

On January 8, ZIP announced the pricing of a public offering of $550 million aggregate principal amount of 5.000% Senior Notes due 2030. The company intends to use the net proceeds from the offering for general corporate purposes, including capital expenditures, investments, and working capital.

ZIP’s revenue increased 106.8% year-over-year to $212.67 million in the fiscal third quarter ended September 30. Gross profit grew 111.8% from the year-ago value to $190.40 million. Net income improved 29.7% year-over-year to $22.06 million. In addition, the cash balance increased 100.3% from its year-ago value to $204.88 million for nine months ended September 30.

Analysts expect the company’s revenue to increase 74.2% year-over-year to $728.21 million for the fiscal year ended December 2021.

The stock has gained 7.2% since it went public on May 26 but has declined 9.3% year-to-date to close its last trading session at $22.62. The stock is currently trading 31.2% below its 52-week high of $32.90.

ZIP’s POWR Ratings reflect its solid fundamentals. The company has an overall rating of B, which translates to Buy in our proprietary rating system. ZIP is rated an A in Quality and a B in Value and Sentiment. It is ranked #12 in the same industry. Get ZIP’s Growth, Momentum, and Stability ratings here.

RHI shares were trading at $123.36 per share on Thursday afternoon, down $1.17 (-0.94%). Year-to-date, RHI has gained 10.62%, versus a -5.12% rise in the benchmark S&P 500 index during the same period.

About the Author: Subhasree Kar

Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics. More...

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