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Robert Half International Spinning Gold On Staffing And Consulting

Mar. 02, 2020 6:47 AM ETRobert Half Inc. (RHI) Stock2 Comments
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  • RHI has a strong track record of dividend growth for the past 16 years.
  • Payout ratios are conservative to sustain increasing dividend payouts.
  • Company's margins are stable in spite of the competitiveness of the staffing industry.
  • Consistent buybacks have boosted EPS growth in recent years.

Investment Thesis

Robert Half International Inc. (NYSE:RHI) is an asset-light staffing and consulting firm with a strong balance sheet. It has no debt, has delivered a close to 10X EPS growth in the last decade, and has consistently increased its dividends for the past 16 years. For those who believe in the long-term resilience of the US economy and are looking for a dividend play, RHI presents a solid investment proposition.

About RHI

Robert Half International is the world's largest accounting and finance staffing firm. It deals with 3 main segments: temporary and consulting staffing, permanent placement staffing, and risk consulting/internal audit service. The company is a member of the S&P500 and is based out of Menlo Park, CA. Robert Half International has close to 19,000 employees and more than 400 locations worldwide.

The company derives 77% of its revenue from the US and the remaining 23% from international markets. RHI is present in South America, Europe, and Asia. Among the international markets, Europe makes up the largest chunk of the overseas business.

RHI's temporary staffing segment accounts for 74% of total revenues. Permanent placement makes up only 9% while the audit and risk consulting segment contributes 17% of the total revenues. So the business is US-centric and heavily focused on temporary staffing and consulting services.

Recent Performance

Over the past 5 years, the company has seen sales grow at a CAGR of 5.2% from close to $4.7 billion to over $6 billion. Operating margins have also been very steady, at around 10%, throughout this time. All three of RHI's segments saw revenue growth in 2019. The US unemployment rate, as of December 2019, was at a historic 50-year low of 3.5%. The combination of a strong economy and a significant demand for skilled talent have worked out in RHI's favor.

This article was written by

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Pursuing dividend growth investing to generate passive income ultimately gaining financial independence, living of dividend income. With +30 year horizon I tend to prefer dividend growth over high starting dividend yield with low growth. Articles are based on my own opinion and should not be seen as investment advice

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in RHI over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (2)

Alexander Schiller profile picture
Thank you for the update on this underfollowed stock!
one issue will be the quality of the successor management.
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