3 Staffing Stocks to Buy as Job Growth Remains Solid Higher job openings and rising demand for labor in the past few months have significantly fueled the demand for outsourcing and staffing service providers. As job growth remains solid, investing...

Higher job openings and rising demand for labor in the past few months have significantly fueled the demand for outsourcing and staffing service providers. As job growth remains solid, investing in shares of GEE Group (JOB), Robert Half International (RHI), and Kforce (KFRC) could be rewording. Let's discuss….

The heightened need for labor in various industries amid a tight labor market has driven the demand for outsourcing and staffing service providers. In addition, the government's assistance in strengthening domestic production to improve the hammered global production lines has fueled labor demand.

Earlier this month, the Labor Department reported that the U.S. economy added 372,000 jobs in June, surpassing analysts' expectations. The increase in employment reflects that the economy is still going strong despite the issues concerning soaring inflation and rising interest rates.

According to a new report from Staffing Industry Analysts, global staffing revenue is expected to expand by 9% this year, after an increase of 21% in 2021. Also, the global recruitment process outsourcing market is projected to reach $25.38 billion by 2028, growing at a 17% CAGR.

Given the industry's solid growth prospects, investing in fundamentally sound staffing stocks GEE Group, Inc. (JOB), Robert Half International Inc. (RHI), and Kforce Inc. (KFRC) could be rewarding.

GEE Group, Inc. (JOB)

JOB offers permanent and temporary professional and industrial staffing and placement services. Operating through two segments: Industrial Staffing Services and Professional Staffing Services, it provides placement of IT, accounting, finance, office, engineering, and medical professionals for direct hire and contract staffing for its clients.

JOB's net revenues for its fiscal second quarter ended March 31, 2022, increased 14% year-over-year to $39.63 million. Its income from operations increased 84.8% from the prior-year period to $1.18 million, while its adjusted net income stood at $2.24 million, up 228.9% from the year-ago period.

Also, Its EPS came in at $0.01, representing a 110% improvement from the year-ago period. In addition, its adjusted EBITDA increased 68.9% year-over-year to $3.44 million.

For the quarter ending September 30, 2022, JOB's EPS and revenue are expected to increase 300% and 6% year-over-year to $0.02 and $43.94 million, respectively. The stock has gained 20.2% over the past nine months to close the last trading session at $0.57.

JOB's strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

It has an A grade for Value and a B grade for Growth, Sentiment, and Quality. The stock is ranked #4 out of 19 stocks in the A-rated Outsourcing - Staffing Services industry. Click here to see the other ratings of JOB for Momentum and Stability.

Robert Half International Inc. (RHI)

RHI is a specialized talent solutions and business consulting firm that offers contract and permanent placement solutions. Operating through three segments: Temporary and Consultant Staffing, Permanent Placement Staffing, and Risk Consulting and Internal Audit Services, it connects opportunities at great companies with highly skilled job seekers.

On May 3, 2022, Forbes ranked RHI first in the professional recruiting, temporary staffing, and executive recruiting firms list. This reflects the company's strong performance among its peers.

In the first quarter ended March 31, 2022, RHI's service revenues increased 29.8% year-over-year to $1.81 billion. Its gross margin increased 37.4% from the year-ago value to $771.85 million, while its net income grew 52.1% year-over-year to $168.24 million. The company's EPS came in at $1.52, representing a 61.2% year-over-year improvement.

Analysts expect RHI's EPS and revenues to increase 19.3% and 20.1% year-over-year to $1.59 and $1.90 billion in the fiscal second quarter (ended June 2022). It surpassed the consensus EPS estimates in each of the trailing four quarters, which is excellent.

Shares of RHI have gained 6.1% over the past month to close yesterday's trading session at $81.50.

RHI's POWR Ratings reflect these solid prospects. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system. It has an A grade for Quality and a B grade for Value. In the same industry, it is ranked #8.

Beyond what we've stated above, we have also given RHI grades for Growth, Momentum, Stability, and Sentiment. Get all the RHI ratings here.

Kforce Inc. (KFRC)

KFRC provides flexible and permanent professional staffing services and solutions through Technology, and Finance and Accounting segments. It specializes in the areas of IT, finance and accounting, human resources, engineering, pharmaceuticals, healthcare, legal, and scientific.

For its fiscal 2022 first quarter ended March 31, 2022, KFRC's revenue increased 14.8% year-over-year to $416.97 million. Its income from operations came in at $27.74 million, up 42.6% from the year-ago period.

The company's net income grew 44.6% year-over-year to $19.18 million, while its adjusted EBITDA increased 38.3% from the year-ago value to $33.27 million. Also, its EPS increased 50% year-over-year to $0.93.

For the second quarter ended June 2022, KFRC's EPS is expected to increase 17.8% year-over-year to$1.18, while its revenue is expected to increase 9.1% year-over-year to $440.45 million. It surpassed the consensus EPS estimates in each of the trailing four quarters.

The stock has gained 7.6% over the past month to close the last trading session at $62.29.

KFRC's POWR Ratings reflect this promising outlook. The stock has an overall A grade, which equates to a Strong Buy in our proprietary rating system. It has a B grade for Growth, Value, Stability, and Quality.

Again, in the Outsourcing - Staffing Services industry, it is ranked #3. Click here to see the additional ratings of KFRC for Momentum and Sentiment.

JOB shares rose $0.00 (+0.87%) in premarket trading Wednesday. Year-to-date, JOB has gained 1.75%, versus a -16.85% rise in the benchmark S&P 500 index during the same period.

About the Author: Shweta Kumari

Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.

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