After a challenging year, the staffing industry is bouncing back, with temporary and contract staffing requirements rising across almost all industries. Next-generation automation, data-driven staffing, remote work, and project-based hiring are some of the factors driving the recovery of the staffing industry this year.

According to the Staffing Industry Analysts (SIA), the global staffing industry is projected to grow by 12% and reach $445 billion this year. Also, the U.S. staffing revenue is expected to rise 16% this year to a record total of $157.4 billion. As job openings hit record highs with healthcare and social assistance sectors requiring most workers, staffing companies should benefit.

Given the rising demand for workers in a reopening economy, it could be wise to bet on prominent staffing stocks such as TrueBlue, Inc. (TBI) and Resources Connection, Inc. (RGP). These stocks are expected to keep rallying due to their strong fundamentals and stable financials.

TrueBlue, Inc. (TBI)

Incorporated in 1985, TBI is a specialized workforce solutions provider that operates in three segments PeopleReady; PeopleManagement; and PeopleScout. The company offers skilled labor, contingent labor, outsourced industrial workforce solutions, permanent employee recruitment process outsourcing, employer branding services, and outsourced labor service providers management through PeopleScout RPO and PeopleScout MSP.

TBI’s revenue for the second quarter that ended June 27, 2021, increased 43.7% year-over-year to $515.96 million. The company’s gross profit grew 64% from the year-ago value to $136.47 million. Its income from operations came in at $18.94 million for the quarter, compared to a loss from operations of $21.23 million in the prior-year quarter. Also, the company’s net income amounted to $15.88 million, compared to a net loss of $8.17 million in the second quarter ended 2020.

Analysts expect TBI’s revenue to increase 15.2% year-over-year to $2.13 billion in the fiscal year 2021. Also, the company has an impressive earnings surprising history; it surpassed the consensus EPS estimates in each of the trailing four quarters. In addition, its EPS is expected to increase 297.7% in the current year. Moreover, the stock has gained 57.4% over the past nine months and 84.9% over the past year.

TBI’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall grade of A, which equates to a Strong Buy rating in our proprietary ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

Also, the stock has a B grade for Value, Growth, and Quality. We’ve also graded TBI for Sentiment, Stability, and Momentum. Click here to access all of TBI’s ratings. TBI is ranked #2 out of 19 stocks in the A-rated Outsourcing – Staffing Services industry.

Resources Connection, Inc. (RGP)

RGP is a global consulting firm that provides services under the name Resources Global Professionals. The company offers business initiative support services to its client base in accounting; finance; corporate governance, risk, and compliance (GRC) management; human capital; and legal and regulatory. Also, it offers a range of technology management solutions and supply chain management system solutions.

This month, RGP announced a strategic alliance with a global consulting firm, Kotter, to enable both companies to accelerate their joint business development initiatives. This partnership will also initiate a business transformation to help clients achieve significant, sustainable organizational and cultural transformation and new ways to solve business problems.

During the fiscal fourth quarter that ended May 29, 2021, RGP’s operating income increased 107.5% year-over-year to $15.46 million. The company’s net income grew 471.6% from the year-ago value to $23.25 million. Its EPS rose 438.5% from the prior-year quarter to $0.7. Also, the company’s revenue increased 10% sequentially to $172.32 million.

RGP’s revenue for the fiscal year 2022 is expected to be $703.47 million, representing an 11.7% year-over-year growth. The company has an impressive earnings surprise history; it beat the consensus EPS in three of the trailing four quarters. Also, its EPS is expected to grow 17.3% next year. RGP’s stock price surged 30.2% over the past nine months.

RGP’s POWR Ratings reflect this promising outlook. The stock has an overall grade of A, which equates to a Strong Buy rating in our proprietary ratings system. Also, the stock has a B grade for Value, Growth, and Quality.

In addition to the POWR Rating grades I’ve just highlighted, one can see RGP’s grades for Momentum, Stability, and Sentiment here. The stock is ranked #5 in the same industry.

TBI shares were trading at $28.78 per share on Wednesday afternoon, down $0.79 (-2.67%). Year-to-date, TBI has gained 53.99%, versus a 16.86% rise in the benchmark S&P 500 index during the same period.

About the Author: Priyanka Mandal

Priyanka is a passionate investment analyst and financial journalist. After earning a master's degree in economics, her interest in financial markets motivated her to begin her career in investment research. More...

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