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By January 11, 2013 2 Comments

Barrett Business Services Inc. (NASDAQ: BBSI); Nice Small-Cap Dividend Play

Barrett Business Services Inc. (NASDAQ: BBSI); Nice Small-Cap Dividend Play

Barrett Business Services Inc. (NASDAQ: BBSI); Nice Small-Cap Dividend Play

2012 was a mighty fine year for Barrett Business Services Inc. (NASDAQ: BBSI). In fact, this small-cap offering, $280.5 million, has been outperforming quarterly earnings expectations for the past three years. Since the release of its third-quarter results on Oct 23, 2012, shares have jumped over 27 percent. The company’s 52 week return of 74 percent and its history of surpassing quarterly earnings estimates make this play an eye-catching opportunity for perspective investors. Additionally the company is expected to grow earnings by 35 percent over the next five years, significantly higher than the 17.8 percent for the industry taken as a whole. Barrett Business Services reported third quarter earnings per share of 81 cents, far ahead of the Zacks Consensus Estimate of 71 cents and up 50 percent from the same quarter in 2011. For the fourth quarter, the company has projected gross revenues between $585 million and $590 million, while earnings per share are expected at 75 cents to 78 cents.

Barrett Business Services, Inc. affords business management solutions to businesses located in the United States. The company presents resource management services in areas consisting of payroll processing, employee benefits and administration. It also provides numerous professional employer organization services as well as staffing services, including long and short-term staffing assignments. Executives attribute strong performance to their solid client base and high customer retention. BBSI is an established brand and has strong referral channels which contribute tremendously to new client growth.

Currently revenues are driven by strong growth in the Professional Employer Organization client count and exceedingly strong same-store sales growth. Barrett’s professional employer and staffing services segments report revenue increase of 40.5 percent and 4.6 percent correspondingly. The company has consistently traded above its 200 day moving average since the beginning of last year. It has also stayed above its 50 day moving average since June 14 of 2012. Barrett has outperformed the S&P 500 Index since July 25 of 2012.

In the end, what makes Barrett Business Services one of the prettier girls at the dance is that it rewards shareholder confidence through regular and ever increasing quarterly dividends.  The company’s continuous dividend payment is a reflection of its earnings growth power and ability to generate strong cash flow. Shares are currently trading at around $40, a 52 week high.

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