Here's Why You Should Retain Insperity (NSP) Stock for Now

Insperity, Inc. NSP is currently aided by a booming professional employer organization industry and investor-friendly steps. Meanwhile, high debt is worrisome.

NSP has an impressive Growth Score of A. This style score condenses all the essential metrics from Insperity’s financial statements to get a true sense of the quality and sustainability of its growth.

Insperity has an expected long-term earnings per share (three to five years) growth rate of 15%. Further, earnings are anticipated to register growth of 20.3% and 19.9% in 2022 and 2023, respectively.

Factors That Augur Well

Insperity makes consistent efforts to reward its shareholders. During 2021, NSP repurchased 716,000 shares for $69.7 million and paid out dividends totaling $144.2 million. In 2020, NSP repurchased 1.4 million shares for $99.4 million and paid out dividends totaling $61.9 million. NSP repurchased 2.1 million shares for $203 million and paid out dividends totaling $48.6 million in 2019. Such moves indicate NSP’s commitment toward boosting its shareholder value, which underlines its confidence in business.

Shares of NSP have gained 8.7% in the past year against a 14.9% decrease of the industry it belongs to.

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Insperity looks strong on the back of a growing professional employer organization (“PEO”) industry. PEO is currently being driven by growth of small and medium-sized businesses, increased need of providing employee benefits, higher costs related to workers’ compensation insurance coverage, workplace safety programs, employee-related complaints and litigation, complex regulation of payroll, payroll tax and employment issues as well as related costs of compliance, expenses, time and knowledge. These are required for the technology infrastructure to achieve benefits, HR and payroll processing on an integrated basis.

Some Risks

Insperity's current ratio at the end of first-quarter 2022 was pegged at 1.11, lower than the current ratio of 1.20 reported at the end of the prior-year quarter. Decreasing current ratio is not desirable as it indicates that a company may have problems fulfilling its short-term debt obligations.

Zacks Rank and Stocks to Consider

Insperity currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the broader Zacks Business Services sector are Avis Budget Group, Inc. CAR, Cross Country Healthcare CCRN and CRA International, Inc. CRAI.

Avis Budget sports a Zacks Rank #1 at present. CAR has a long-term earnings growth expectation of 19.4%.

Avis Budget delivered a trailing four-quarter earnings surprise of 102%, on average.

Cross Country Healthcare flaunts a Zacks Rank of 1 at present. CCRN has a long-term earnings growth expectation of 6.9%.

Cross Country Healthcare delivered a trailing four-quarter earnings surprise of 29.2%, on average.

CRA International carries a Zacks Rank #2 (Buy), currently. CRAI has a long-term earnings growth expectation of 14.3%.

CRAI delivered a trailing four-quarter earnings surprise of 35.8%, on average.  

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