Financial Comparison: Resources Connection (NASDAQ:RGP) & Upwork (NASDAQ:UPWK)

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

Insider and Institutional Ownership

93.2% of Resources Connection shares are owned by institutional investors. Comparatively, 77.7% of Upwork shares are owned by institutional investors. 7.9% of Resources Connection shares are owned by company insiders. Comparatively, 4.9% of Upwork shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Resources Connection has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500. Comparatively, Upwork has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Resources Connection and Upwork, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Resources Connection	1	1	2	0	2.25
Upwork	1	9	3	0	2.15

Resources Connection presently has a consensus price target of $7.00, suggesting a potential upside of 57.30%. Upwork has a consensus price target of $15.50, suggesting a potential upside of 61.63%. Given Upwork’s higher possible upside, analysts clearly believe Upwork is more favorable than Resources Connection.

Earnings and Valuation

This table compares Resources Connection and Upwork”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Resources Connection	$452.01 million	0.34	-$40.60 million	($1.20)	-3.71
Upwork	$790.56 million	1.50	$115.43 million	$0.81	11.84

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Resources Connection	-8.98%	-4.63%	-3.16%
Upwork	13.81%	17.92%	8.54%

Summary

Upwork beats Resources Connection on 11 of the 14 factors compared between the two stocks.

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.

About Upwork

Upwork Inc., together with its subsidiaries, operates a work marketplace that connects businesses with various independent professionals and agencies in the United States, India, the Philippines, and internationally. The company’s work marketplace provides access to talent with various skills across a range of categories, including administrative support, sales and marketing, design and creative, and customer service, as well as web, mobile, and software development. Its work marketplace also enables clients to streamline workflows, such as talent sourcing, outreach, and contracting. The company’s work marketplace offers access to various functionalities for remote engagements with talent, including communication and collaboration, ability to receive talent invoices through their work marketplace, and payment protection. Its marketplace offerings include Upwork Payroll and Upwork Enterprise, as well as managed and escrow services. The company was formerly known as Elance-oDesk, Inc. and changed its name to Upwork Inc. in May 2015. Upwork Inc. was incorporated in 2013 and is headquartered in San Francisco, California.