Reviewing R C M Technologies (RCMT) and StarTek (SRT)

R C M Technologies (NASDAQ:RCMT) and StarTek (NYSE:SRT) are both small-cap business services companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Profitability

This table compares R C M Technologies and StarTek’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
R C M Technologies 1.37% 28.20% 10.17%
StarTek -6.49% -16.48% -7.52%

Analyst Recommendations

This is a summary of current ratings and recommmendations for R C M Technologies and StarTek, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
R C M Technologies 0 0 0 0 N/A
StarTek 0 2 1 0 2.33

StarTek has a consensus target price of $12.67, indicating a potential upside of 111.82%. Given StarTek’s higher probable upside, analysts clearly believe StarTek is more favorable than R C M Technologies.

Insider & Institutional Ownership

31.2% of R C M Technologies shares are held by institutional investors. Comparatively, 14.5% of StarTek shares are held by institutional investors. 12.7% of R C M Technologies shares are held by insiders. Comparatively, 17.8% of StarTek shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

R C M Technologies has a beta of 0.27, suggesting that its stock price is 73% less volatile than the S&P 500. Comparatively, StarTek has a beta of 0.25, suggesting that its stock price is 75% less volatile than the S&P 500.

Earnings and Valuation

This table compares R C M Technologies and StarTek’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
R C M Technologies $186.74 million 0.28 $2.01 million N/A N/A
StarTek $292.60 million 0.76 -$1.27 million ($0.08) -74.75

R C M Technologies has higher earnings, but lower revenue than StarTek.

Summary

R C M Technologies beats StarTek on 7 of the 12 factors compared between the two stocks.

About R C M Technologies

RCM Technologies, Inc. provides business and technology solutions to the commercial and government sectors in the United States, Canada, the Puerto Rico, and Serbia. The company operates through three segments: Engineering, Specialty Health Care, and Information Technology. The Engineering segment provides engineering and design, engineering analysis, engineer-procure-construct, configuration management, hardware/software validation and verification, quality assurance, technical writing and publications, manufacturing process planning and improvement, and 3D/BIM integrated design. The Specialty Health Care Services segment provides long-term and short-term staffing, executive search, and placement services in the fields of rehabilitation, including physical therapists, occupational therapists, and speech language pathologists; nursing; managed care; allied health care; health care management; medical office support; and non-medical caregivers or companions. This segment also offers in-patient, outpatient, sub-acute and acute care, multilingual speech pathology, rehabilitation, geriatric, pediatric, and adult day care services to hospitals, long-term care facilities, schools, sports medicine facilities, and private practices. The Information Technology segment offers enterprise business solutions, application services, infrastructure solutions, competitive advantage and productivity solutions, life sciences solutions, and other vertical market specific solutions. The company also serves aerospace/defense, educational institution, energy, financial services, health care, life sciences, manufacturing and distribution, and the public sector and technology industries. RCM Technologies, Inc. was founded in 1971 and is headquartered in Pennsauken, New Jersey.

About StarTek

StarTek, Inc. operates as a customer engagement business process outsourcing services provider that delivers contact center and customer engagement solutions. It offers technical and product support, sales support, provisioning and order processing, receivables management, healthcare services, up-sell and cross-sell program, and customer intelligence analytics; and additional services, such as technology enabled and human interaction to other industry-specific processes, including training curriculum development, workforce management, customer analytics, quality monitoring services, and dispositions. The company serves client programs using a variety of multi-channel customer interaction capabilities, including voice, chat, email, social media, interactive voice response, and back-office support. It operates engagement centers in the United States, Canada, Honduras, Jamaica, and the Philippines. The company was founded in 1987 and is headquartered in Greenwood Village, Colorado.

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