Critical Review: BGSF (NYSE:BGSF) and KBR (NYSE:KBR)

KBR (NYSE:KBR) and BGSF (NYSE:BGSF) are both industrials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, earnings, risk, dividends, analyst recommendations and profitability.

Volatility and Risk

KBR has a beta of 0.44, indicating that its share price is 56% less volatile than the S&P 500. Comparatively, BGSF has a beta of 0.44, indicating that its share price is 56% less volatile than the S&P 500.

Earnings and Valuation

This table compares KBR and BGSF”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KBR	$7.79 billion	0.56	$415.00 million	$3.32	10.48
BGSF	$93.31 million	0.57	-$11.43 million	($0.74)	-6.69

KBR has higher revenue and earnings than BGSF. BGSF is trading at a lower price-to-earnings ratio than KBR, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

97.0% of KBR shares are owned by institutional investors. Comparatively, 37.2% of BGSF shares are owned by institutional investors. 1.1% of KBR shares are owned by company insiders. Comparatively, 7.1% of BGSF shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares KBR and BGSF’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KBR	5.49%	32.55%	7.62%
BGSF	-8.99%	-13.69%	-10.60%

Analyst Ratings

This is a summary of recent recommendations for KBR and BGSF, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KBR	0	5	3	0	2.38
BGSF	1	0	0	0	1.00

KBR currently has a consensus target price of $45.00, suggesting a potential upside of 29.37%. Given KBR’s stronger consensus rating and higher probable upside, equities research analysts clearly believe KBR is more favorable than BGSF.

Summary

KBR beats BGSF on 11 of the 13 factors compared between the two stocks.

About KBR

KBR, Inc. provides scientific, technology, and engineering solutions to governments and commercial customers worldwide. It operates through Government Solutions and Sustainable Technology Solutions segments. The Government Solutions segment offers life-cycle support solutions to defense, intelligence, space, aviation, and other programs and missions for military and other government agencies in the United States, the United Kingdom, and Australia. Its services cover research and development, advanced prototyping, acquisition support, systems engineering, cyber analytics, space domain awareness, test and evaluation, systems integration and program management, global supply chain management, and operations readiness and support, as well as command, control, communications, computers, intelligence, surveillance, and reconnaissance services. This segment also provides various professional advisory services to the defense, renewable energy, and critical infrastructure sectors. The Sustainable Technology Solutions segment operates portfolio of various proprietary process technologies for ammonia/syngas, chemical/petrochemicals, clean refining, and circular process/circular economy solutions. This segment also provides synergistic services, including advisory and consulting focused on broad-based energy transition and net-zero carbon emission solutions; high-end engineering, design and program management centered around decarbonization, energy efficiency, environmental impact and asset optimization; and digitally-enabled operating and monitoring solutions. KBR, Inc. was founded in 1901 and is headquartered in Houston, Texas.

About BGSF

BGSF, Inc., together with its subsidiaries, provides consulting, managed services, and professional workforce solutions in the United States. It operates in two segments, Property Management and Professional. The Property Management segment offers office and maintenance field talent to various apartment communities and commercial buildings. The Professional segment provides skilled IT professionals in SAP, Workday, Peoplesoft, Hyperion, Oracle, One Stream, cyber, project management, management services, and other IT workforce solutions. This segment also offers finance, accounting, legal, human resource, and related support personnel. It serves its products to fortune 500 companies, and medium and small companies, as well as consulting companies. The company was formerly known as BG Staffing, Inc. and changed its name to BGSF, Inc. in February 2021. BGSF, Inc. was incorporated in 2007 and is based in Plano, Texas.