Resources Connection (NASDAQ: RECN) and Acacia Research Corporation (NASDAQ:ACTG) are both small-cap business services companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, profitability, dividends and earnings.

Valuation & Earnings

This table compares Resources Connection and Acacia Research Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Resources Connection $583.41 million 0.83 $18.65 million $0.47 34.36
Acacia Research Corporation $152.70 million 1.42 -$54.06 million $2.40 1.79

Resources Connection has higher revenue and earnings than Acacia Research Corporation. Acacia Research Corporation is trading at a lower price-to-earnings ratio than Resources Connection, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Resources Connection and Acacia Research Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Resources Connection 2.60% 8.08% 5.40%
Acacia Research Corporation 145.12% 50.75% 46.80%

Dividends

Resources Connection pays an annual dividend of $0.48 per share and has a dividend yield of 3.0%. Acacia Research Corporation does not pay a dividend. Resources Connection pays out 102.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider & Institutional Ownership

80.4% of Resources Connection shares are held by institutional investors. Comparatively, 69.3% of Acacia Research Corporation shares are held by institutional investors. 11.8% of Resources Connection shares are held by company insiders. Comparatively, 7.7% of Acacia Research Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Resources Connection has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500. Comparatively, Acacia Research Corporation has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Resources Connection and Acacia Research Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Resources Connection 1 1 0 0 1.50
Acacia Research Corporation 1 0 1 0 2.00

Resources Connection currently has a consensus target price of $14.00, suggesting a potential downside of 13.31%. Acacia Research Corporation has a consensus target price of $6.50, suggesting a potential upside of 51.16%. Given Acacia Research Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe Acacia Research Corporation is more favorable than Resources Connection.

Summary

Acacia Research Corporation beats Resources Connection on 10 of the 16 factors compared between the two stocks.

Resources Connection Company Profile

Resources Connection, Inc. is a multinational consulting firm. The Company’s operating entities primarily provide services under the name Resources Global Professionals (RGP). The Company provides consulting and business initiative support services to its global client base in the areas of accounting; finance; corporate governance, risk and compliance (GRC) management; corporate advisory, strategic communications and restructuring; information management; human capital; supply chain management, and legal and regulatory. The Company provides its services and solutions to a client base in a range of industries. Its finance and accounting services encompass accounting operations, financial reporting, internal controls, financial analyses and business transactions. It offers a range of technology solutions, which include enterprise resource planning systems; strategic front-of-the-house systems; human resources (HR) information systems, and supply chain management systems, among others.

Acacia Research Corporation Company Profile

Acacia Research Corporation, through its subsidiaries, invests in, licenses and enforces patented technologies. The Company’s operating subsidiaries partner with inventors and patent owners, applying their legal and technology expertise to patent assets to unlock the financial value in their patented inventions. The Company’s operating subsidiaries assist patent owners with the prosecution and development of their patent portfolios, the protection of their patented inventions from unauthorized use, the generation of licensing revenue from users of their patented technologies and, where necessary, with the enforcement against unauthorized users of their patented technologies through the filing of patent infringement litigation. The Company’s operating subsidiaries own or control the rights to multiple patent portfolios, which include the United States patents and certain foreign counterparts, covering technologies used in a range of industries.

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