Critical Review: TriNet Group (TNET) vs. Its Competitors

TriNet Group (NYSE:TNET) is one of 203 public companies in the “Professional Services” industry, but how does it weigh in compared to its rivals? We will compare TriNet Group to similar businesses based on the strength of its analyst recommendations, dividends, risk, earnings, profitability, institutional ownership and valuation.

Earnings and Valuation

This table compares TriNet Group and its rivals top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
TriNet Group	$4.88 billion	$155.00 million	17.03
TriNet Group Competitors	$3.41 billion	$230.01 million	29.88

TriNet Group has higher revenue, but lower earnings than its rivals. TriNet Group is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Volatility and Risk

TriNet Group has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500. Comparatively, TriNet Group’s rivals have a beta of 0.98, meaning that their average stock price is 2% less volatile than the S&P 500.

Profitability

This table compares TriNet Group and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TriNet Group	3.58%	227.28%	6.04%
TriNet Group Competitors	0.60%	21.15%	4.80%

Dividends

TriNet Group pays an annual dividend of $1.16 per share and has a dividend yield of 1.8%. TriNet Group pays out 31.0% of its earnings in the form of a dividend. As a group, “Professional Services” companies pay a dividend yield of 2.5% and pay out -115.4% of their earnings in the form of a dividend. TriNet Group has increased its dividend for 1 consecutive years. TriNet Group lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Analyst Recommendations

This is a breakdown of current ratings and target prices for TriNet Group and its rivals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TriNet Group	1	5	1	0	2.00
TriNet Group Competitors	1583	6447	9210	430	2.48

TriNet Group presently has a consensus target price of $56.80, indicating a potential downside of 10.81%. As a group, “Professional Services” companies have a potential upside of 28.70%. Given TriNet Group’s rivals stronger consensus rating and higher probable upside, analysts plainly believe TriNet Group has less favorable growth aspects than its rivals.

Insider and Institutional Ownership

96.8% of TriNet Group shares are owned by institutional investors. Comparatively, 57.4% of shares of all “Professional Services” companies are owned by institutional investors. 40.0% of TriNet Group shares are owned by company insiders. Comparatively, 17.2% of shares of all “Professional Services” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

TriNet Group rivals beat TriNet Group on 8 of the 15 factors compared.

About TriNet Group

TriNet Group, Inc. provides comprehensive and flexible human capital management services for small and medium size businesses in the United States. The company offers multi-state payroll processing and tax administration; employee benefits programs, including health insurance and retirement plans; workers compensation insurance and claims management; employment and benefits law compliance; and other HR related services. It also provides technology platform, an online and mobile tool that allows users to store, view, and manager HR information and administer various HR transactions, such as payroll processing, tax administration and credits, employee onboarding and termination, employee performance, time and attendance, compensation reporting, expense management, and benefits enrollment and administration, as well as incorporated workforce analytics and allows professional employer organization clients to generate HR data, payroll, compensation, and other custom reports. The company serves clients in various industries, including technology, professional services, financial services, life sciences, and not-for-profit. It sells its solutions through its direct sales organization. TriNet Group, Inc. was incorporated in 1988 and is headquartered in Dublin, California.