Reviewing Star Equity (NASDAQ:STRR) and Barrett Business Services (NASDAQ:BBSI)

Star Equity (NASDAQ:STRR) and Barrett Business Services (NASDAQ:BBSI) are both small-cap industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, profitability, analyst recommendations, dividends and risk.

Earnings and Valuation

This table compares Star Equity and Barrett Business Services”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Star Equity	$172.16 million	0.23	-$5.92 million	($3.06)	-3.47
Barrett Business Services	$1.24 billion	0.66	$54.45 million	$1.36	24.93

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Star Equity and Barrett Business Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Star Equity	1	1	1	1	2.50
Barrett Business Services	1	2	2	1	2.50

Star Equity presently has a consensus target price of $28.00, suggesting a potential upside of 163.53%. Barrett Business Services has a consensus target price of $41.00, suggesting a potential upside of 20.91%. Given Star Equity’s higher probable upside, equities analysts clearly believe Star Equity is more favorable than Barrett Business Services.

Risk & Volatility

Star Equity has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500. Comparatively, Barrett Business Services has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500.

Insider & Institutional Ownership

3.8% of Star Equity shares are held by institutional investors. Comparatively, 86.8% of Barrett Business Services shares are held by institutional investors. 31.6% of Star Equity shares are held by company insiders. Comparatively, 4.8% of Barrett Business Services shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Star Equity and Barrett Business Services’ 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%
Barrett Business Services	2.77%	20.95%	6.11%

Summary

Barrett Business Services beats Star Equity on 11 of the 13 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 Barrett Business Services

Barrett Business Services, Inc. provides business management solutions for small and mid-sized companies in the United States. The company develops a management platform that integrates a knowledge-based approach from the management consulting industry with tools from the human resource outsourcing industry. It offers professional employer services under which it enters into a client services agreement to establish a co-employment relationship with each client company, assuming responsibility for payroll, payroll taxes, workers compensation coverage, and other administration functions for the client’s existing workforce. The company provides staffing and recruiting services, such as on-demand or short-term staffing assignment, contract staffing, direct placement, and long-term or indefinite-term on-site management services. It serves electronics manufacturers, light-manufacturing industries, agriculture-based companies, transportation and shipping enterprises, food processors, telecommunications companies, public utilities, general contractors in various construction-related fields, restaurant franchises, and professional services firms. Barrett Business Services, Inc. was incorporated in 1965 and is headquartered in Vancouver, Washington.