Robert Half International Inc Valuation – March 2019 #RHI

Company Profile (excerpt from Reuters): Robert Half International Inc., incorporated on October 18, 1979, provides specialized staffing and risk consulting services. The Company provides these services through its divisions, including Accountemps, Robert Half Finance & Accounting, OfficeTeam, Robert Half Technology, Robert Half Management Resources, Robert Half Legal, The Creative Group and Protiviti. The Company operates through three segments: temporary and consultant staffing, permanent placement staffing, and risk consulting and internal audit services. The temporary and consultant staffing segment provides specialized staffing in the accounting and finance, administrative and office, information technology (IT), legal, advertising, marketing and Web design fields. The permanent placement staffing segment provides full-time personnel in the accounting, finance, administrative and office, and IT fields. The risk consulting and internal audit services segment provides business and technology risk consulting, and internal audit services.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of RHI – March 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $7,830,569,534 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.80 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 222.15% Pass
6. Moderate PEmg Ratio PEmg < 20 20.63 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 7.41 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.80 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $3.19
MG Growth Estimate 7.39%
MG Value $74.20
Opinion Fairly Valued
MG Grade C+
MG Value based on 3% Growth $46.21
MG Value based on 0% Growth $27.09
Market Implied Growth Rate 6.07%
Current Price $65.75
% of Intrinsic Value 88.61%

Robert Half International Inc. is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, high PEmg and PB ratios. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Fairly Valued after growing its EPSmg (normalized earnings) from $2.13 in 2015 to an estimated $3.19 for 2019. This level of demonstrated earnings growth supports the market’s implied estimate of 6.07% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

At the time of valuation, further research into Robert Half International Inc. revealed the company was trading above its Graham Number of $26.99. The company pays a dividend of $1.12 per share, for a yield of 1.7% Its PEmg (price over earnings per share – ModernGraham) was 20.63, which was below the industry average of 32.74, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $5.29.

Robert Half International Inc. receives an average overall rating in the ModernGraham grading system, scoring a C+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) $5.29
Graham Number $26.99
PEmg 20.63
Current Ratio 1.80
PB Ratio 7.41
Current Dividend $1.12
Dividend Yield 1.70%
Number of Consecutive Years of Dividend Growth 15

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2018
Total Current Assets $1,473,610,000
Total Current Liabilities $819,536,000
Long-Term Debt $457,000
Total Assets $1,903,097,000
Intangible Assets $213,107,000
Total Liabilities $839,899,000
Shares Outstanding (Diluted Average) 119,829,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $3.70
Dec2018 $3.57
Dec2017 $2.33
Dec2016 $2.67
Dec2015 $2.69
Dec2014 $2.26
Dec2013 $1.83
Dec2012 $1.50
Dec2011 $1.04
Dec2010 $0.44
Dec2009 $0.24
Dec2008 $1.59
Dec2007 $1.81
Dec2006 $1.65
Dec2005 $1.36
Dec2004 $0.79
Dec2003 $0.04
Dec2002 $0.01
Dec2001 $0.67
Dec2000 $1.00
Dec1999 $0.77

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $3.19
Dec2018 $2.85
Dec2017 $2.45
Dec2016 $2.40
Dec2015 $2.13
Dec2014 $1.71
Dec2013 $1.29
Dec2012 $1.00
Dec2011 $0.84
Dec2010 $0.88
Dec2009 $1.18
Dec2008 $1.58
Dec2007 $1.42
Dec2006 $1.08
Dec2005 $0.72
Dec2004 $0.43
Dec2003 $0.33

Recommended Reading:

Other ModernGraham posts about the company

Robert Half International Inc Valuation – June 2018 $RHI
11 Best Stocks for Value Investors This Week – 3/4/17
Robert Half International Inc Valuation – February 2017 $RHI
10 Undervalued Stocks for the Defensive Investor – December 2016
10 Undervalued Stocks for the Defensive Investor – September 2016

Other ModernGraham posts about related companies

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IHS Markit Ltd Valuation – February 2019 $INFO
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Iron Mountain Inc Valuation – February 2019 $IRM
Cintas Corp Valuation – February 2019 $CTAS
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Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Robert Half International Inc Valuation – June 2018 $RHI

Company Profile (excerpt from Reuters): Robert Half International Inc., incorporated on October 18, 1979, provides specialized staffing and risk consulting services. The Company provides these services through its divisions, including Accountemps, Robert Half Finance & Accounting, OfficeTeam, Robert Half Technology, Robert Half Management Resources, Robert Half Legal, The Creative Group and Protiviti. The Company operates through three segments: temporary and consultant staffing, permanent placement staffing, and risk consulting and internal audit services. The temporary and consultant staffing segment provides specialized staffing in the accounting and finance, administrative and office, information technology (IT), legal, advertising, marketing and Web design fields. The permanent placement staffing segment provides full-time personnel in the accounting, finance, administrative and office, and IT fields. The risk consulting and internal audit services segment provides business and technology risk consulting, and internal audit services.

RHI Chart

RHI data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of RHI – June 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $7,924,066,633 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.92 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 378.49% Pass
6. Moderate PEmg Ratio PEmg < 20 23.39 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 7.07 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.92 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $2.74
MG Growth Estimate 9.06%
MG Value $72.95
Opinion Fairly Valued
MG Grade C+
MG Value based on 3% Growth $39.75
MG Value based on 0% Growth $23.30
Market Implied Growth Rate 7.45%
Current Price $64.13
% of Intrinsic Value 87.91%

Robert Half International Inc. is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, high PEmg and PB ratios. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Fairly Valued after growing its EPSmg (normalized earnings) from $1.71 in 2014 to an estimated $2.74 for 2018. This level of demonstrated earnings growth supports the market’s implied estimate of 7.45% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

At the time of valuation, further research into Robert Half International Inc. revealed the company was trading above its Graham Number of $25.43. The company pays a dividend of $0.96 per share, for a yield of 1.5% Its PEmg (price over earnings per share – ModernGraham) was 23.39, which was below the industry average of 34.82, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $5.61.

Robert Half International Inc. receives an average overall rating in the ModernGraham grading system, scoring a C+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) $5.61
Graham Number $25.43
PEmg 23.39
Current Ratio 1.92
PB Ratio 7.07
Current Dividend $0.96
Dividend Yield 1.50%
Number of Consecutive Years of Dividend Growth 14

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2018
Total Current Assets $1,468,456,000
Total Current Liabilities $764,440,000
Long-Term Debt $608,000
Total Assets $1,893,860,000
Intangible Assets $215,385,000
Total Liabilities $779,063,000
Shares Outstanding (Diluted Average) 122,887,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $3.23
Dec2017 $2.33
Dec2016 $2.67
Dec2015 $2.69
Dec2014 $2.26
Dec2013 $1.83
Dec2012 $1.50
Dec2011 $1.04
Dec2010 $0.44
Dec2009 $0.24
Dec2008 $1.59
Dec2007 $1.81
Dec2006 $1.65
Dec2005 $1.36
Dec2004 $0.79
Dec2003 $0.04
Dec2002 $0.01
Dec2001 $0.67
Dec2000 $1.00
Dec1999 $0.77
Dec1998 $0.69

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.74
Dec2017 $2.45
Dec2016 $2.40
Dec2015 $2.13
Dec2014 $1.71
Dec2013 $1.29
Dec2012 $1.00
Dec2011 $0.84
Dec2010 $0.88
Dec2009 $1.18
Dec2008 $1.58
Dec2007 $1.42
Dec2006 $1.08
Dec2005 $0.72
Dec2004 $0.43
Dec2003 $0.33
Dec2002 $0.53

Recommended Reading:

Other ModernGraham posts about the company

11 Best Stocks for Value Investors This Week – 3/4/17
Robert Half International Inc Valuation – February 2017 $RHI
10 Undervalued Stocks for the Defensive Investor – December 2016
10 Undervalued Stocks for the Defensive Investor – September 2016
5 Undervalued Companies for the Defensive Investor Near 52 Week Lows – August 2016

Other ModernGraham posts about related companies

Alliance Data Systems Corp Valuation – May 2018 $ADS
Whirlpool Corporation Valuation – April 2018 $WHR
IHS Markit Ltd Valuation – Initial Coverage April 2018 $INFO
Automatic Data Processing Inc Valuation – April 2018 $ADP
Accenture PLC Valuation – April 2018 $ACN
Fiserv Inc Valuation – April 2018 $FISV
Iron Mountain Inc Valuation – April 2018 $IRM
Cintas Corp Valuation – April 2018 $CTAS
Xerox Corp Valuation – March 2018 $XRX
Avery Dennison Corp Valuation – March 2018 $AVY

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Robert Half International Inc Valuation – February 2017 $RHI

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – February 2017.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Robert Half International Inc (RHI) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Robert Half International Inc. provides specialized staffing and risk consulting services. The Company’s divisions are Accountemps, Robert Half Finance & Accounting, OfficeTeam, Robert Half Technology, Robert Half Management Resources, Robert Half Legal, The Creative Group and Protiviti. It operates through three segments: temporary and consultant staffing, permanent placement staffing, and risk consulting and internal audit services. The Accountemps, Robert Half Finance & Accounting and Robert Half Management Resources divisions provide professionals in the fields of accounting and finance. Its OfficeTeam specializes in skilled temporary administrative support personnel. Robert Half Technology provides information technology (IT) professionals. Robert Half Legal provides staffing of attorneys and specialized support personnel. The Creative Group provides project staffing in the interactive media, design and marketing fields. Protiviti is a business consulting and internal audit firm.

RHI Chart

RHI data by YCharts

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Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Recent valuations of the components of the Dow Jones Industrial Average are available for free members, including this one of Microsoft Corporation.  In addition, here is a post detailing what can be found within each individual company’s valuation.

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Downloadable PDF version of this valuation:

ModernGraham Valuation of RHI – February 2017

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $6,126,568,023 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.89 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 248.02% Pass
6. Moderate PEmg Ratio PEmg < 20 19.03 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 5.68 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.89 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EPSmg $2.52
MG Growth Estimate 14.24%
MG Value $93.20
Opinion Undervalued
MG Grade B-
MG Value based on 3% Growth $36.54
MG Value based on 0% Growth $21.42
Market Implied Growth Rate 5.27%
Current Price $47.96
% of Intrinsic Value 51.46%

Robert Half International Inc. is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, high PB ratio. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $1.29 in 2013 to an estimated $2.52 for 2017. This level of demonstrated earnings growth outpaces the market’s implied estimate of 5.27% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Robert Half International Inc. revealed the company was trading above its Graham Number of $21.95. The company pays a dividend of $0.88 per share, for a yield of 1.8% Its PEmg (price over earnings per share – ModernGraham) was 19.03, which was below the industry average of 21.9, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $4.6.

Robert Half International Inc. performs fairly well in the ModernGraham grading system, scoring a B-.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) $4.60
Graham Number $21.95
PEmg 19.03
Current Ratio 1.89
PB Ratio 5.68
Current Dividend $0.88
Dividend Yield 1.83%
Number of Consecutive Years of Dividend Growth 5

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2016
Total Current Assets $1,284,234,000
Total Current Liabilities $679,896,000
Long-Term Debt $840,000
Total Assets $1,777,971,000
Intangible Assets $213,464,000
Total Liabilities $691,372,000
Shares Outstanding (Diluted Average) 128,766,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.54
Dec2016 $2.67
Dec2015 $2.69
Dec2014 $2.26
Dec2013 $1.83
Dec2012 $1.50
Dec2011 $1.04
Dec2010 $0.44
Dec2009 $0.24
Dec2008 $1.59
Dec2007 $1.81
Dec2006 $1.65
Dec2005 $1.36
Dec2004 $0.79
Dec2003 $0.04
Dec2002 $0.01
Dec2001 $0.67
Dec2000 $1.00
Dec1999 $0.77
Dec1998 $0.69
Dec1997 $0.50

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.52
Dec2016 $2.40
Dec2015 $2.13
Dec2014 $1.71
Dec2013 $1.29
Dec2012 $1.00
Dec2011 $0.84
Dec2010 $0.88
Dec2009 $1.18
Dec2008 $1.58
Dec2007 $1.42
Dec2006 $1.08
Dec2005 $0.72
Dec2004 $0.43
Dec2003 $0.33
Dec2002 $0.53
Dec2001 $0.77

Recommended Reading:

Other ModernGraham posts about the company

10 Undervalued Stocks for the Defensive Investor – December 2016
10 Undervalued Stocks for the Defensive Investor – September 2016
5 Undervalued Companies for the Defensive Investor Near 52 Week Lows – August 2016
21 Best Undervalued Stocks of the Week – 8/27/16
Robert Half International Inc Valuation – August 2016 $RHI

Other ModernGraham posts about related companies

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Dun & Bradstreet Corp Valuation – January 2017 $DNB
Apollo Education Group Inc Valuation – January 2017 $APOL
Accenture PLC Valuation – December 2016 $ACN
Automatic Data Processing Valuation – November 2016 $ADP
United Rentals Inc Valuation – August 2016 $URI

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Robert Half International Inc Valuation – August 2016 $RHI

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Companies Benjamin Graham Would Invest In Today – July 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Robert Half International Inc (RHI) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Robert Half International Inc. provides specialized staffing and risk consulting services. The Company’s divisions are Accountemps, Robert Half Finance & Accounting, OfficeTeam, Robert Half Technology, Robert Half Management Resources, Robert Half Legal, The Creative Group and Protiviti. It operates through three segments: temporary and consultant staffing, permanent placement staffing, and risk consulting and internal audit services. The Accountemps, Robert Half Finance & Accounting and Robert Half Management Resources divisions provide professionals in the fields of accounting and finance. Its OfficeTeam specializes in skilled temporary administrative support personnel. Robert Half Technology provides information technology (IT) professionals. Robert Half Legal provides staffing of attorneys and specialized support personnel. The Creative Group provides project staffing in the interactive media, design and marketing fields. Protiviti is a business consulting and internal audit firm.

RHI Chart

RHI data by YCharts

[level-free]
To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[not-level-free]

Downloadable PDF version of this valuation:

ModernGraham Valuation of RHI – August 2016

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $5,127,400,884 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.11 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 109.89% Pass
6. Moderate PEmg Ratio PEmg < 20 16.07 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 4.68 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.11 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

RHI value chart August 2016

EPSmg $2.41
MG Growth Estimate 15.00%
MG Value $92.79
Opinion Undervalued
MG Grade B+
MG Value based on 3% Growth $34.95
MG Value based on 0% Growth $20.49
Market Implied Growth Rate 3.79%
Current Price $38.74
% of Intrinsic Value 41.75%

Robert Half International Inc. qualifies for both the Defensive Investor and the Enterprising Investor. The Defensive Investor is only initially concerned with the high PB ratio. The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $1 in 2012 to an estimated $2.41 for 2016. This level of demonstrated earnings growth outpaces the market’s implied estimate of 3.79% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Robert Half International Inc. revealed the company was trading above its Graham Number of $22.3. The company pays a dividend of $0.84 per share, for a yield of 2.2%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 16.07, which was below the industry average of 21.38, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $5.37.

Robert Half International Inc. performs fairly well in the ModernGraham grading system, scoring a B+.

Stage 3: Information for Further Research

RHI charts August 2016

Net Current Asset Value (NCAV) $5.37
Graham Number $22.30
PEmg 16.07
Current Ratio 2.11
PB Ratio 4.68
Current Dividend $0.84
Dividend Yield 2.17%
Number of Consecutive Years of Dividend Growth 4

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2016
Total Current Assets $1,408,112,000
Total Current Liabilities $668,179,000
Long-Term Debt $925,000
Total Assets $1,783,008,000
Intangible Assets $214,378,000
Total Liabilities $713,500,000
Shares Outstanding (Diluted Average) 129,329,000

Earnings Per Share History

Next Fiscal Year Estimate $2.69
Dec2015 $2.69
Dec2014 $2.26
Dec2013 $1.83
Dec2012 $1.50
Dec2011 $1.04
Dec2010 $0.44
Dec2009 $0.24
Dec2008 $1.59
Dec2007 $1.81
Dec2006 $1.65
Dec2005 $1.36
Dec2004 $0.79
Dec2003 $0.04
Dec2002 $0.01
Dec2001 $0.67
Dec2000 $1.00
Dec1999 $0.77
Dec1998 $0.69
Dec1997 $0.50
Dec1996 $0.34

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $2.41
Dec2015 $2.13
Dec2014 $1.71
Dec2013 $1.29
Dec2012 $1.00
Dec2011 $0.84
Dec2010 $0.88
Dec2009 $1.18
Dec2008 $1.58
Dec2007 $1.42
Dec2006 $1.08
Dec2005 $0.72
Dec2004 $0.43
Dec2003 $0.33
Dec2002 $0.53
Dec2001 $0.77
Dec2000 $0.77

Recommended Reading:

Other ModernGraham posts about the company

10 Undervalued Stocks for the Defensive Investor – August 2016
5 Companies for Defensive Investors Near 52 Week Lows – Aug 2016
10 Most Undervalued Companies for the Defensive Investor – July 2016
10 Most Undervalued Companies for the Defensive Investor – May 2016
Robert Half International Inc Valuation – February 2016 $RHI

Other ModernGraham posts about related companies

Accenture PLC Valuation – August 2016 $ACN
Fiserv Inc Valuation – August 2016 $FISV
Cintas Corporation Valuation – July 2016 $CTAS
Pitney Bowes Inc Valuation – July 2016 $PBI
Xerox Corp Valuation – June 2016 $XRX
Avery Dennison Corp Valuation – June 2016 $AVY
Ecolab Inc Valuation – June 2016 $ECL
Paychex Inc Valuation – June 2016 $PAYX
Automatic Data Processing Valuation – May 2016 $ADP
Robert Half International Inc Valuation – February 2016 $RHI

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Robert Half International Inc Valuation – February 2016 $RHI

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Companies Benjamin Graham Would Invest In Today – February 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Robert Half International Inc (RHI) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Robert Half International Inc. is engaged in providing specialized staffing and risk consulting services. The Company provides staffing and risk consulting services through the divisions: Accountemps, Robert Half Finance & Accounting, OfficeTeam, Robert Half Technology, Robert Half Management Resources, Robert Half Legal, The Creative Group and Protiviti. The Company operates through three segments: temporary and consultant staffing, permanent placement staffing, and risk consulting and internal audit services. The temporary and consultant segment provides specialized staffing in the accounting and finance, administrative and office, information technology, legal, advertising, marketing and Web design fields. The permanent placement segment provides full-time personnel in the accounting, finance, administrative and office, and information technology fields. The risk consulting segment provides business and technology risk consulting and internal audit services.

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To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

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Downloadable PDF version of this valuation:

ModernGraham Valuation of RHI

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $4,934,213,008 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.08 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 114.29% Pass
6. Moderate PEmg Ratio PEmg < 20 15.30 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 4.99 Fail
Score
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.08 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

RHI value chart February 2016

EPSmg $2.46
MG Growth Estimate 15.00%
MG Value $94.84
Opinion Undervalued
MG Value based on 3% Growth $35.72
MG Value based on 0% Growth $20.94
Market Implied Growth Rate 3.40%
Current Price $37.70
% of Intrinsic Value 39.75%

Robert Half International Inc. qualifies for the Enterprising Investor and the more conservative Defensive Investor. The Defensive Investor is only concerned with the high PB ratio. The Enterprising Investor only has concerns regarding the level of debt relative to the net current assets.  As a result, value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $1.00 in 2012 to an estimated $2.46 for 2016. This level of demonstrated earnings growth outpaces the market’s implied estimate of 3.4% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

Stage 3: Information for Further Research

RHI charts February 2016

Net Current Asset Value (NCAV) -$5.26
Graham Number $22.00
PEmg 15.30
Current Ratio 2.08
PB Ratio 4.99
Dividend Yield 2.12%
Number of Consecutive Years of Dividend Growth 4

 

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Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information Dec2015
Total Current Assets $0
Total Current Liabilities $655,549,000
Long-Term Debt $1,007,000
Total Assets $1,702,960,000
Intangible Assets $0
Total Liabilities $699,179,000
Shares Outstanding (Diluted Average) 132,930,000

Earnings Per Share History

Next Fiscal Year Estimate $2.85
Dec2015 $2.69
Dec2014 $2.26
Dec2013 $1.83
Dec2012 $1.50
Dec2011 $1.04
Dec2010 $0.44
Dec2009 $0.24
Dec2008 $1.59
Dec2007 $1.81
Dec2006 $1.65
Dec2005 $1.36
Dec2004 $0.79
Dec2003 $0.04
Dec2002 $0.01
Dec2001 $0.67
Dec2000 $1.00
Dec1999 $0.77
Dec1998 $0.69
Dec1997 $0.50
Dec1996 $0.34

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $2.46
Dec2015 $2.13
Dec2014 $1.71
Dec2013 $1.29
Dec2012 $1.00
Dec2011 $0.84
Dec2010 $0.88
Dec2009 $1.18
Dec2008 $1.58
Dec2007 $1.42
Dec2006 $1.08
Dec2005 $0.72
Dec2004 $0.43
Dec2003 $0.33
Dec2002 $0.53
Dec2001 $0.77
Dec2000 $0.77

Recommended Reading:

Other ModernGraham posts about the company

The Best Companies of the Business Support Industry – November 2015
The 8 Best Stocks For Value Investors This Week – 8/8/15
Robert Half International Inc. Analysis – August 2015 Update $RHI
47 Companies in the Spotlight This Week – 5/16/15
Robert Half International Quarterly Valuation – May 2015 $RHI

Other ModernGraham posts about related companies

Accenture PLC Valuation – February 2016 $ACN
Cintas Corp Valuation – December 2015 Update $CTAS
The Best Companies of the Business Support Industry – November 2015
Paychex Inc. Valuation – November 2015 Update $PAYX
Robert Half International Inc. Valuation – November 2015 Update $RHI
Alliance Data Systems Corporation Analysis – October 2015 Update $ADS
Automatic Data Processing Analysis – September 2015 Update $ADP
Accenture PLC Analysis – September 2015 Update $ACN
Dun & Bradstreet Corp. Analysis – September 2015 Update $DNB
Cintas Corporation Analysis – August 2015 Update $CTAS

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Robert Half International Inc. Valuation – November 2015 Update $RHI

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Most Undervalued Companies for the Defensive Investor – October 2015.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Robert Half International Inc. (RHI) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Robert Half International Inc. is engaged in providing specialized staffing and risk consulting services. The Company provides staffing and risk consulting services through the divisions: Accountemps, Robert Half Finance & Accounting, OfficeTeam, Robert Half Technology, Robert Half Management Resources, Robert Half Legal, The Creative Group and Protiviti. The Company operates through three segments: temporary and consultant staffing, permanent placement staffing, and risk consulting and internal audit services. The temporary and consultant segment provides specialized staffing in the accounting and finance, administrative and office, information technology, legal, advertising, marketing and Web design fields. The permanent placement segment provides full-time personnel in the accounting, finance, administrative and office, and information technology fields. The risk consulting segment provides business and technology risk consulting and internal audit services.

[level-free]

To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[level-mg-stocks-screens-subscriber]

Downloadable PDF version of this valuation:

ModernGraham Valuation of RHI – November 2015

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $7,004,477,821 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.08 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 33.86% Pass
6. Moderate PEmg Ratio PEmg < 20 24.82 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 6.95 Fail
Score
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.08 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

RHI value Chart November 2015

EPSmg $2.13
MG Growth Estimate 15.00%
MG Value $81.93
Opinion Undervalued
MG Value based on 3% Growth $30.86
MG Value based on 0% Growth $18.09
Market Implied Growth Rate 8.16%
Current Price $52.81
% of Intrinsic Value 64.46%

Robert Half International Inc. qualifies for the Enterprising Investor but not the more conservative Defensive Investor.  The Defensive Investor is concerned with the high PEmg and PB ratios.  The Enterprising Investor has no initial concerns.  As a result, all Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $0.84 in 2011 to an estimated $2.13 for 2015.  This level of demonstrated earnings growth outpaces the market’s implied estimate of 8.16% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Robert Half International Inc. (RHI)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Stage 3: Information for Further Research

RHI Charts November 2015

Net Current Asset Value (NCAV) $5.09
Graham Number $21.20
PEmg 24.82
Current Ratio 2.08
PB Ratio 6.95
Dividend Yield 1.48%
Number of Consecutive Years of Dividend Growth 3

 

[/level-mg-stocks-screens-subscriber]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Total Current Assets $1,383,372,000
Total Current Liabilities $664,169,000
Long-Term Debt $1,046,000
Total Assets $1,715,272,000
Intangible Assets $197,992,000
Total Liabilities $708,796,000
Shares Outstanding (Diluted Average) 132,488,000

Earnings Per Share History

Next Fiscal Year Estimate $2.67
Dec14 $2.26
Dec13 $1.83
Dec12 $1.50
Dec11 $1.04
Dec10 $0.44
Dec09 $0.24
Dec08 $1.59
Dec07 $1.81
Dec06 $1.65
Dec05 $1.36
Dec04 $0.79
Dec03 $0.04
Dec02 $0.01
Dec01 $0.67
Dec00 $1.00
Dec99 $0.77
Dec98 $0.69
Dec97 $0.50
Dec96 $0.34
Dec95 $0.23

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $2.13
Dec14 $1.71
Dec13 $1.29
Dec12 $1.00
Dec11 $0.84
Dec10 $0.88
Dec09 $1.18
Dec08 $1.58
Dec07 $1.42
Dec06 $1.08
Dec05 $0.72
Dec04 $0.43
Dec03 $0.33
Dec02 $0.53
Dec01 $0.77
Dec00 $0.77
Dec99 $0.60

Recommended Reading:

Other ModernGraham posts about the company

The 8 Best Stocks For Value Investors This Week – 8/8/15
Robert Half International Inc. Analysis – August 2015 Update $RHI
47 Companies in the Spotlight This Week – 5/16/15
Robert Half International Quarterly Valuation – May 2015 $RHI
27 Companies in the Spotlight This Week – 2/14/15

Other ModernGraham posts about related companies

Alliance Data Systems Corporation Analysis – October 2015 Update $ADS
Automatic Data Processing Analysis – September 2015 Update $ADP
Accenture PLC Analysis – September 2015 Update $ACN
Dun & Bradstreet Corp. Analysis – September 2015 Update $DNB
Cintas Corporation Analysis – August 2015 Update $CTAS
Apollo Education Group Inc. Analysis – Initial Coverage $APOL
Paychex Inc. Analysis – August 2015 Update $PAYX
Robert Half International Inc. Analysis – August 2015 Update $RHI
United Rentals Inc. Analysis – Initial Coverage $URI
Automatic Data Processing Analysis – June 2015 Update $ADP

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Robert Half International Inc. Analysis – August 2015 Update $RHI

Rhalf_logoBenjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 5 Most Undervalued Companies for the Defensive Investor – July 2015.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Robert Half International Inc. (RHI) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Robert Half International Inc. is engaged in providing specialized staffing and risk consulting services. The Company provides staffing and risk consulting services through the divisions: Accountemps, Robert Half Finance & Accounting, OfficeTeam, Robert Half Technology, Robert Half Management Resources, Robert Half Legal, The Creative Group and Protiviti. The Company operates through three segments: temporary and consultant staffing, permanent placement staffing, and risk consulting and internal audit services. The temporary and consultant segment provides specialized staffing in the accounting and finance, administrative and office, information technology, legal, advertising, marketing and Web design fields. The permanent placement segment provides full-time personnel in the accounting, finance, administrative and office, and information technology fields. The risk consulting segment provides business and technology risk consulting and internal audit services.

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To read the rest of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.
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Defensive Investor – must pass at least 6 of the following 7 tests: Score = 4/7

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Sufficiently Strong Financial Condition – current ratio greater than 2 – PASS
  3. Earnings Stability – positive earnings per share for at least 10 straight years -PASS
  4. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  5. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – FAIL
  6. Moderate PEmg ratio – PEmg is less than 20 – FAIL
  7. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – FAIL

Enterprising Investor – must pass at least 4 of the following 5 tests or be suitable for a defensive investor: Score = 5/5

  1. Sufficiently Strong Financial Condition, Part 1 – current ratio greater than 1.5 – PASS
  2. Sufficiently Strong Financial Condition, Part 2 – Debt to Net Current Assets ratio less than 1.1 – PASS
  3. Earnings Stability – positive earnings per share for at least 5 years – PASS
  4. Dividend Record – currently pays a dividend – PASS
  5. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $55.82
MG Value $81.41
MG Opinion Undervalued
Value Based on 3% Growth $30.66
Value Based on 0% Growth $17.97
Market Implied Growth Rate 8.95%
Net Current Asset Value (NCAV) $5.15
PEmg 26.40
Current Ratio 2.10
PB Ratio 7.35

Balance Sheet – June 2015

Current Assets $1,397,000,000
Current Liabilities $664,000,000
Total Debt $1,000,000
Total Assets $1,723,000,000
Intangible Assets $199,000,000
Total Liabilities $709,000,000
Outstanding Shares 133,600,000

Earnings Per Share

2015 (estimate) $2.63
2014 $2.26
2013 $1.83
2012 $1.50
2011 $1.04
2010 $0.44
2009 $0.24
2008 $1.59
2007 $1.81
2006 $1.65
2005 $1.36

Earnings Per Share – ModernGraham

2015 (estimate) $2.11
2014 $1.71
2013 $1.29
2012 $1.00
2011 $0.84
2010 $0.88

Dividend History

Free Cash Flow

Conclusion:

Robert Half International Inc. qualifies for the Enterprising Investor but not the more conservative Defensive Investor.  The Defensive Investor is concerned with the insufficient earnings growth over the last ten years as well as the high PEmg and PB ratios.  The Enterprising Investor has no initial concerns.  As a result, all Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with the evaluation.  As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $0.84 in 2011 to an estimated $2.11 for 2015.  This level of demonstrated earnings growth surpasses the market’s implied estimate of 8.95% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Robert Half International Inc. (RHI)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from Wikipedia for the sole purpose of identifying the company; this article is not affiliated with the company in any manner.

[/level-mg-stocks-screens-subscriber]

 

Robert Half International Quarterly Valuation – May 2015 $RHI

Rhalf_logoRobert Half International Inc. (NYSE:RHI) should attract all Enterprising Investors, particularly due to the company’s stable earnings growth over the last few years. That said, Benjamin Graham, the father of value investing, taught that the most important aspect to consider is whether the company is trading at a discount relative to its intrinsic value. It is through a thorough fundamental analysis that the investor is able to determine a potential investment’s merits. Here’s an updated look at how Robert Half International fares in the ModernGraham valuation model.

This model is inspired by the teachings of Benjamin Graham, and considers numerous metrics intended to help the investor reduce risk levels. The first part of the analysis is to determine whether the company is suitable for the very conservative Defensive Investor or the less conservative Enterprising Investor, who is willing to spend a greater amount of time conducting further research.

In addition, Graham strongly suggested that investors avoid speculation, in order to remove the subjective elements of emotion. This is best achieved by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another. By using the ModernGraham method, one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.

RHI Chart

RHI data by YCharts

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To read the rest of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.
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Defensive Investor – Must pass at least 6 of the following 7 tests: Score = 4/7

  1. Adequate Size of Enterprise – Market capitalization of at least $2 billion – PASS
  2. Sufficiently Strong Financial Condition – Current ratio greater than 2 – PASS
  3. Earnings Stability – Positive earnings per share for at least 10 straight years – PASS
  4. Dividend Record – Has paid a dividend for at least 10 straight years – PASS
  5. Earnings Growth – Earnings per share has increased by at least one-third over the last 10 years, using three-year averages at the beginning and end of the period – FAIL
  6. Moderate PEmg (price over normalized earnings) ratio – PEmg is less than 20 – FAIL
  7. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – FAIL

Enterprising Investor – Must pass at least 4 of the following 5 tests, or be suitable for a Defensive Investor: Score = 5/5

  1. Sufficiently Strong Financial Condition, Part 1 – Current ratio greater than 1.5 – PASS
  2. Sufficiently Strong Financial Condition, Part 2 – Debt-to-Net Current Assets ratio less than 1.1 – PASS
  3. Earnings Stability – Positive earnings per share for at least 5 years – PASS
  4. Dividend Record – Currently pays a dividend – PASS
  5. Earnings Growth – EPSmg greater than that 5 years ago – PASS

Valuation Summary

Key Data

Recent Price $55.60
MG Value $62.86
MG Opinion Fairly Valued
Value Based on 3% Growth $24.79
Value Based on 0% Growth $14.53
Market Implied Growth Rate 12.01%
Net Current Asset Value (NCAV) $4.84
PEmg 32.53
Current Ratio 2.12
PB Ratio 7.69

Balance Sheet – December 2014

Current Assets $1,323,000,000
Current Liabilities $623,000,000
Total Debt $1,000,000
Total Assets $1,647,000,000
Intangible Assets $199,000,000
Total Liabilities $667,000,000
Outstanding Shares 135,500,000

Earnings Per Share

2014 $2.26
2013 $1.83
2012 $1.50
2011 $1.04
2010 $0.44
2009 $0.24
2008 $1.59
2007 $1.81
2006 $1.65
2005 $1.36
2004 $0.79

Earnings Per Share – ModernGraham

2014 $1.71
2013 $1.29
2012 $1.00
2011 $0.84
2010 $0.88
2009 $1.18

Dividend History

RHI Dividend Chart

RHI Dividend data by YCharts

Conclusion

Robert Half International should satisfy the Enterprising Investor, but not the Defensive Investor. The Defensive Investor is concerned with the level of earnings growth over the last ten years, and high PEmg and PB ratios, while the Enterprising Investor has no initial concerns. Therefore, Enterprising Investors should feel very comfortable proceeding to the next part of the analysis, which is a determination of the company’s intrinsic value.

From a valuation side of things, the company has grown its EPSmg (normalized earnings) from $0.88 in 2011 to $1.71 for 2014. This level of demonstrated growth is in line with the market’s implied estimate for earnings growth of 12.01% over the next 7-10 years. The ModernGraham valuation model, therefore, returns an estimate of intrinsic value falling within a margin of safety relative to the current price, indicating Robert Half International is fairly valued at the present time.

Disclaimer: The author did not hold a position in any of the companies listed in this article at the time of publication and had no intention of changing that position within the next 72 hours. Logos taken from either the company website or Wikipedia; this article is not affiliated with the companies in any manner.

[/level-mg-stocks-screens-subscriber]

Robert Half International Quarterly Valuation – February 2015 $RHI

Rhalf_logoBenjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 5 Most Undervalued Companies for the Defensive Investor – January 2015.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how Robert Half International (RHI) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Robert Half International Inc. provides specialized staffing and risk consulting services. The Company operates in three segments: temporary and consultant staffing, permanent placement staffing, and risk consulting and internal audit services. The Company, through its Accountemps, Robert Half Finance & Accounting, and Robert Half Management Resources divisions, is a specialized provider of temporary, full-time, and project professionals in the fields of accounting and finance. OfficeTeam specializes in skilled temporary administrative support personnel. Robert Half Technology provides information technology professionals. Robert Half Legal provides temporary, project, and full-time staffing of attorneys and specialized support personnel within law firms and corporate legal departments. The Creative Group provides project staffing in the advertising, marketing, and Web design fields. Protiviti is a global business consulting and internal audit firm.

Defensive Investor – must pass at least 6 of the following 7 tests: Score = 4/7

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Sufficiently Strong Financial Condition – current ratio greater than 2 – PASS
  3. Earnings Stability – positive earnings per share for at least 10 straight years – PASS
  4. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  5. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – FAIL
  6. Moderate PEmg ratio – PEmg is less than 20 – FAIL
  7. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – FAIL

Enterprising Investor – must pass at least 4 of the following 5 tests or be suitable for a defensive investor: Score = 5/5

  1. Sufficiently Strong Financial Condition, Part 1 – current ratio greater than 1.5 – PASS
  2. Sufficiently Strong Financial Condition, Part 2 – Debt to Net Current Assets ratio less than 1.1 – PASS
  3. Earnings Stability – positive earnings per share for at least 5 years – PASS
  4. Dividend Record – currently pays a dividend – PASS
  5. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $61.16
MG Value $62.86
MG Opinion Fairly Valued
Value Based on 3% Growth $24.79
Value Based on 0% Growth $14.53
Market Implied Growth Rate 13.64%
Net Current Asset Value (NCAV) $4.90
PEmg 35.78
Current Ratio 2.11
PB Ratio 8.49

Balance Sheet – September 2014

Current Assets $1,315,000,000
Current Liabilities $624,000,000
Total Debt $1,300,000
Total Assets $1,627,000,000
Intangible Assets $200,000,000
Total Liabilities $654,000,000
Outstanding Shares 135,000,000

Earnings Per Share

2014 $2.26
2013 $1.83
2012 $1.50
2011 $1.04
2010 $0.44
2009 $0.24
2008 $1.59
2007 $1.81
2006 $1.65
2005 $1.36
2004 $0.79

Earnings Per Share – ModernGraham

2014 $1.71
2013 $1.29
2012 $1.00
2011 $0.84
2010 $0.88
2009 $1.18

Dividend History

Conclusion:

Robert Half International is suitable for the Enterprising Investor but not for the Defensive Investor.  The Defensive Investor is concerned by the insufficient level of earnings growth over the last ten years along with the high PEmg and PB ratios, while the Enterprising Investor has no initial concerns.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel very comfortable proceeding with further research and comparing the company to other opportunities.  From a valuation side of things, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $0.88 in 2010 to $1.71 for 2014.  This level of demonstrated growth supports the market’s implied estimate of 13.64% earnings growth and leads the ModernGraham valuation model, based on Benjamin Graham’s formula, to return an estimate of intrinsic value within a margin of safety relative to the price.

Be sure to check out previous ModernGraham valuations of Robert Half International (RHI) for greater perspective!

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Robert Half International (RHI)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in Robert Half International (RHI) or in any other company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from Wikipedia for the sole purpose of identifying the company; this article is not affiliated with the company in any manner.

Robert Half International Quarterly Valuation – November 2014 $RHI

Rhalf_logoBenjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 5 Highest Dividend Yields Among Undervalued Companies for the Defensive Investor – October 2014.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how Robert Half International (RHI) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Robert Half International Inc. provides specialized staffing and risk consulting services. The Company operates in three segments: temporary and consultant staffing, permanent placement staffing, and risk consulting and internal audit services. The Company, through its Accountemps, Robert Half Finance & Accounting, and Robert Half Management Resources divisions, is a specialized provider of temporary, full-time, and project professionals in the fields of accounting and finance. OfficeTeam specializes in skilled temporary administrative support personnel. Robert Half Technology provides information technology professionals. Robert Half Legal provides temporary, project, and full-time staffing of attorneys and specialized support personnel within law firms and corporate legal departments. The Creative Group provides project staffing in the advertising, marketing, and Web design fields. Protiviti is a global business consulting and internal audit firm.

Defensive Investor – must pass at least 6 of the following 7 tests: Score = 4/7

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Sufficiently Strong Financial Condition – current ratio greater than 2 – PASS
  3. Earnings Stability – positive earnings per share for at least 10 straight years – PASS
  4. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  5. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – FAIL
  6. Moderate PEmg ratio – PEmg is less than 20 – FAIL
  7. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – FAIL

Enterprising Investor – must pass at least 4 of the following 5 tests or be suitable for a defensive investor: Score = 5/5

  1. Sufficiently Strong Financial Condition, Part 1 – current ratio greater than 1.5 – PASS
  2. Sufficiently Strong Financial Condition, Part 2 – Debt to Net Current Assets ratio less than 1.1 – PASS
  3. Earnings Stability – positive earnings per share for at least 5 years – PASS
  4. Dividend Record – currently pays a dividend – PASS
  5. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $54.71
MG Value $61.28
MG Opinion Fairly Valued
Value Based on 3% Growth $24.54
Value Based on 0% Growth $14.39
Market Implied Growth Rate 11.91%
Net Current Asset Value (NCAV) $4.87
PEmg 32.32
Current Ratio 2.19
PB Ratio 7.61

Balance Sheet – June 2014

Current Assets $1,274,000,000
Current Liabilities $581,000,000
Total Debt $1,300,000
Total Assets $1,588,000,000
Intangible Assets $200,700,000
Total Liabilities $613,000,000
Outstanding Shares 135,700,000

Earnings Per Share

2014 (estimate) $2.21
2013 $1.83
2012 $1.50
2011 $1.04
2010 $0.44
2009 $0.24
2008 $1.59
2007 $1.81
2006 $1.65
2005 $1.36
2004 $0.79

Earnings Per Share – ModernGraham

2014 (estimate) $1.69
2013 $1.29
2012 $1.00
2011 $0.84
2010 $0.88
2009 $1.18

Dividend History

Conclusion:

Robert Half International is suitable for the Enterprising Investor but not the Defensive Investor.  The Defensive Investor is concerned by the company’s low level of earnings growth over the last ten years and the high PEmg and PB ratios, while the Enterprising Investor has no initial concerns.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities.  As for a valuation, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $0.88 in 2010 to an estimated $1.69 for 2014.  This level of demonstrated growth supports the market’s implied estimate of 11.91% earnings growth and leads the ModernGraham valuation model, based on Benjamin Graham’s formula, to return an estimate of intrinsic value within a margin of safety relative to the price.

Be sure to check out previous ModernGraham valuations of Robert Half International (RHI) for a better perspective!

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Robert Half International (RHI)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in Robert Half International (RHI) or in any other company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from Wikipedia for the sole purpose of identifying the company; this article is not affiliated with the company in any manner.

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