Resources Connection (NASDAQ:RGP) vs. Star Equity (NASDAQ:STRR) Head to Head Analysis

Star Equity (NASDAQ:STRR) and Resources Connection (NASDAQ:RGP) are both small-cap industrials companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Star Equity and Resources Connection, as provided by MarketBeat.

	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 currently has a consensus target price of $28.00, indicating a potential upside of 180.00%. Resources Connection has a consensus target price of $7.00, indicating a potential upside of 67.87%. Given Star Equity’s stronger consensus rating and higher possible upside, equities analysts plainly believe Star Equity is more favorable than Resources Connection.

Risk & Volatility

Star Equity has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500. Comparatively, Resources Connection has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500.

Valuation and Earnings

This table compares Star Equity and Resources Connection”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Star Equity	$172.16 million	0.21	-$5.92 million	($3.06)	-3.27
Resources Connection	$452.01 million	0.32	-$40.60 million	($1.20)	-3.48

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

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%

Institutional and Insider 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, 5.5% of Resources Connection shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Star Equity beats Resources Connection on 9 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.