Resources Connection (NASDAQ:RGP) vs. Corpay (NYSE:CPAY) Critical Review

Resources Connection (NASDAQ:RGP) and Corpay (NYSE:CPAY) are both business services companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, earnings, risk, dividends, analyst recommendations, institutional ownership and valuation.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Resources Connection and Corpay, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Resources Connection	1	1	1	0	2.00
Corpay	0	4	10	1	2.80

Resources Connection presently has a consensus target price of $13.00, suggesting a potential upside of 54.58%. Corpay has a consensus target price of $369.29, suggesting a potential upside of 8.22%. Given Resources Connection’s higher possible upside, research analysts plainly believe Resources Connection is more favorable than Corpay.

Volatility and Risk

Resources Connection has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500. Comparatively, Corpay has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500.

Earnings & Valuation

This table compares Resources Connection and Corpay”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Resources Connection	$599.57 million	0.47	$21.03 million	$0.36	23.36
Corpay	$3.88 billion	6.13	$981.89 million	$14.02	24.34

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Resources Connection	2.04%	3.69%	2.94%
Corpay	26.14%	39.44%	7.54%

Institutional and Insider Ownership

93.2% of Resources Connection shares are held by institutional investors. Comparatively, 98.8% of Corpay shares are held by institutional investors. 3.4% of Resources Connection shares are held by company insiders. Comparatively, 6.1% of Corpay shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Corpay beats Resources Connection on 14 of the 15 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 Corpay

Corpay, Inc. operates as a payments company that helps businesses and consumers manage vehicle-related expenses, lodging expenses, and corporate payments in the United States, Brazil, the United Kingdom, and internationally. The company offers vehicle payment solutions, which include fuel, tolls, parking, fleet maintenance, and long-haul transportation services, as well as prepaid food and transportation vouchers and cards. It also provides corporate payment solutions consisting of accounts payable automation; virtual cards, cross-border solutions; and purchasing and travel and entertainment card products, as well as lodging payments solutions for employees who travel overnight for work purposes; traveling crews and stranded passengers from airlines and cruise lines; and insurance policyholders displaced from their homes due to damage or catastrophe. In addition, the company offers gifts and payroll cards. It serves business, merchant, consumer, and payment network customers. The company was formerly known as FLEETCOR Technologies, Inc. and changed its name to Corpay, Inc. in March 2024. Corpay, Inc. was founded in 1986 and is headquartered in Atlanta, Georgia.