Star Equity (NASDAQ:STRR – Get Free Report) and Resources Connection (NASDAQ:RGP – Get Free Report) are both small-cap industrials companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, risk, profitability, valuation and institutional ownership.
Insider & Institutional Ownership
3.8% of Star Equity shares are owned by institutional investors. Comparatively, 93.2% of Resources Connection shares are owned by institutional investors. 31.6% of Star Equity shares are owned by company insiders. Comparatively, 7.9% of Resources Connection shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Profitability
This table compares Star Equity and Resources Connection’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Star Equity | -4.35% | -4.21% | -2.39% |
| Resources Connection | -8.98% | -4.63% | -3.16% |
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Star Equity | $172.16 million | 0.22 | -$5.92 million | ($3.06) | -3.33 |
| Resources Connection | $452.01 million | 0.29 | -$40.60 million | ($1.20) | -3.23 |
Star Equity has higher earnings, but lower revenue than Resources Connection. Star Equity is trading at a lower price-to-earnings ratio than Resources Connection, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent ratings and price targets for Star Equity and Resources Connection, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Star Equity | 1 | 1 | 1 | 1 | 2.50 |
| Resources Connection | 1 | 1 | 2 | 0 | 2.25 |
Star Equity presently has a consensus target price of $28.00, suggesting a potential upside of 174.78%. Resources Connection has a consensus target price of $7.00, suggesting a potential upside of 80.88%. Given Star Equity’s stronger consensus rating and higher probable upside, equities analysts plainly believe Star Equity is more favorable than Resources Connection.
Volatility and Risk
Star Equity has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500. Comparatively, Resources Connection has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500.
Summary
Star Equity beats Resources Connection on 8 of the 15 factors compared between the two stocks.
About Star Equity
Star Equity Holdings, Inc. engages in the construction business in the United States and internationally. It operates through two segments: Construction, and Investments. It manufactures modular housing units, structural wall panels, permanent wood foundation systems, and other engineered wood products; supplies general contractors with building materials; holds real estate assets; and manages investments. The company was formerly known as Digirad Corporation and changed its name to Star Equity Holdings, Inc. in December 2020. Star Equity Holdings, Inc. was founded in 1985 and is headquartered in Old Greenwich, Connecticut.
About Resources Connection
Resources Connection, Inc. provides consulting services to business customers under the Resources Global Professionals name in North America, Europe, and the Asia Pacific. The company offers services in the areas of transactions, including integration and divestitures, bankruptcy/restructuring, going public readiness and support, financial process optimization, and system implementation; and regulations, such as accounting regulations, internal audit and compliance, data privacy and security, healthcare compliance, and regulatory compliance. It provides transformations services comprising finance transformation, digital transformation, supply chain management, cloud migration, and data design and analytics. The company was formerly known as RC Transaction Corp. and changed its name to Resources Connection, Inc. in August 2000. Resources Connection, Inc. was founded in 1996 and is headquartered in Irvine, California.
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