Acacia Research Corporation (ACTG) versus Resources Connection (RECN) Critical Analysis
Acacia Research Corporation (NASDAQ: ACTG) and Resources Connection (NASDAQ:RECN) are both small-cap business services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, dividends, earnings and risk.
Volatility and Risk
Acacia Research Corporation has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500. Comparatively, Resources Connection has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500.
This table compares Acacia Research Corporation and Resources Connection’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Acacia Research Corporation||145.12%||50.75%||46.80%|
Resources Connection pays an annual dividend of $0.48 per share and has a dividend yield of 3.1%. Acacia Research Corporation does not pay a dividend. Resources Connection pays out 102.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This is a summary of recent ratings and price targets for Acacia Research Corporation and Resources Connection, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Acacia Research Corporation||1||0||1||0||2.00|
Acacia Research Corporation currently has a consensus price target of $6.50, indicating a potential upside of 58.54%. Resources Connection has a consensus price target of $14.00, indicating a potential downside of 10.54%. Given Acacia Research Corporation’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Acacia Research Corporation is more favorable than Resources Connection.
Institutional & Insider Ownership
72.3% of Acacia Research Corporation shares are owned by institutional investors. Comparatively, 81.8% of Resources Connection shares are owned by institutional investors. 7.7% of Acacia Research Corporation shares are owned by company insiders. Comparatively, 11.8% of Resources Connection shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Earnings and Valuation
This table compares Acacia Research Corporation and Resources Connection’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Acacia Research Corporation||$152.70 million||1.36||-$54.06 million||$2.40||1.71|
|Resources Connection||$583.41 million||0.81||$18.65 million||$0.47||33.30|
Resources Connection has higher revenue and earnings than Acacia Research Corporation. Acacia Research Corporation is trading at a lower price-to-earnings ratio than Resources Connection, indicating that it is currently the more affordable of the two stocks.
Acacia Research Corporation beats Resources Connection on 10 of the 16 factors compared between the two stocks.
About Acacia Research Corporation
Acacia Research Corporation, through its subsidiaries, invests in, licenses and enforces patented technologies. The Company’s operating subsidiaries partner with inventors and patent owners, applying their legal and technology expertise to patent assets to unlock the financial value in their patented inventions. The Company’s operating subsidiaries assist patent owners with the prosecution and development of their patent portfolios, the protection of their patented inventions from unauthorized use, the generation of licensing revenue from users of their patented technologies and, where necessary, with the enforcement against unauthorized users of their patented technologies through the filing of patent infringement litigation. The Company’s operating subsidiaries own or control the rights to multiple patent portfolios, which include the United States patents and certain foreign counterparts, covering technologies used in a range of industries.
About Resources Connection
Resources Connection, Inc. is a multinational consulting firm. The Company’s operating entities primarily provide services under the name Resources Global Professionals (RGP). The Company provides consulting and business initiative support services to its global client base in the areas of accounting; finance; corporate governance, risk and compliance (GRC) management; corporate advisory, strategic communications and restructuring; information management; human capital; supply chain management, and legal and regulatory. The Company provides its services and solutions to a client base in a range of industries. Its finance and accounting services encompass accounting operations, financial reporting, internal controls, financial analyses and business transactions. It offers a range of technology solutions, which include enterprise resource planning systems; strategic front-of-the-house systems; human resources (HR) information systems, and supply chain management systems, among others.
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