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

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

Profitability

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

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

Valuation and Earnings

This table compares Barrett Business Services and Thomson Reuters”s top-line revenue, earnings per share and valuation.

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

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.

Dividends

Barrett Business Services pays an annual dividend of $0.32 per share and has a dividend yield of 1.0%. Thomson Reuters pays an annual dividend of $2.62 per share and has a dividend yield of 2.7%. Barrett Business Services pays out 23.5% of its earnings in the form of a dividend. Thomson Reuters pays out 69.7% 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 increased its dividend for 1 consecutive years.

Analyst Recommendations

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

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

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

Volatility and Risk

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

Institutional and Insider Ownership

86.8% of Barrett Business Services shares are held by institutional investors. Comparatively, 17.3% of Thomson Reuters 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 large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

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

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.

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.