INSPERITY INC (NSP) Stock Fundamental Analysis
NYSE:NSP - New York Stock Exchange, Inc. - US45778Q1076 - Common Stock - Currency: USD
Overall NSP gets a fundamental rating of 5 out of 10. We evaluated NSP against 82 industry peers in the Professional Services industry. NSP has an excellent financial health rating, but there are some minor concerns on its profitability. NSP is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year NSP was profitable.
NSP had a positive operating cash flow in the past year.
In the past 5 years NSP has always been profitable.
Each year in the past 5 years NSP had a positive operating cash flow.
1.2 Ratios
The Return On Assets of NSP (3.50%) is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of 93.81%, NSP belongs to the top of the industry, outperforming 96.20% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 13.01%, NSP is in the better half of the industry, outperforming 74.68% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for NSP is significantly above the industry average of 13.65%.
The last Return On Invested Capital (13.01%) for NSP is well below the 3 year average (21.27%), which needs to be investigated, but indicates that NSP had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.5% | ||
| ROE | 93.81% | ||
| ROIC | 13.01% |
ROA(3y)6.8%
ROA(5y)7.23%
ROE(3y)165.84%
ROE(5y)N/A
ROIC(3y)21.27%
ROIC(5y)21.13%
1.3 Margins
With a Profit Margin value of 1.38%, NSP perfoms like the industry average, outperforming 44.30% of the companies in the same industry.
In the last couple of years the Profit Margin of NSP has declined.
NSP has a worse Operating Margin (1.78%) than 64.56% of its industry peers.
In the last couple of years the Operating Margin of NSP has declined.
NSP has a Gross Margin of 15.99%. This is amonst the worse of the industry: NSP underperforms 83.54% of its industry peers.
NSP's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.78% | ||
| PM (TTM) | 1.38% | ||
| GM | 15.99% |
OM growth 3Y-20.09%
OM growth 5Y-16.29%
PM growth 3Y-17.82%
PM growth 5Y-16.76%
GM growth 3Y-1.03%
GM growth 5Y-1.21%
2. Health
2.1 Basic Checks
NSP has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
NSP has less shares outstanding than it did 1 year ago.
NSP has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, NSP has an improved debt to assets ratio.
2.2 Solvency
NSP has an Altman-Z score of 3.93. This indicates that NSP is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.93, NSP is in the better half of the industry, outperforming 70.89% of the companies in the same industry.
The Debt to FCF ratio of NSP is 0.77, which is an excellent value as it means it would take NSP, only 0.77 years of fcf income to pay off all of its debts.
NSP has a better Debt to FCF ratio (0.77) than 82.28% of its industry peers.
A Debt/Equity ratio of 3.80 is on the high side and indicates that NSP has dependencies on debt financing.
NSP has a Debt to Equity ratio of 3.80. This is amonst the worse of the industry: NSP underperforms 88.61% of its industry peers.
Although NSP does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.8 | ||
| Debt/FCF | 0.77 | ||
| Altman-Z | 3.93 |
ROIC/WACC1.41
WACC9.22%
2.3 Liquidity
A Current Ratio of 1.08 indicates that NSP should not have too much problems paying its short term obligations.
NSP has a worse Current ratio (1.08) than 65.82% of its industry peers.
NSP has a Quick Ratio of 1.08. This is a normal value and indicates that NSP is financially healthy and should not expect problems in meeting its short term obligations.
NSP's Quick ratio of 1.08 is on the low side compared to the rest of the industry. NSP is outperformed by 65.82% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.08 | ||
| Quick Ratio | 1.08 |
3. Growth
3.1 Past
The earnings per share for NSP have decreased strongly by -35.33% in the last year.
Measured over the past years, NSP shows a decrease in Earnings Per Share. The EPS has been decreasing by -2.87% on average per year.
Looking at the last year, NSP shows a small growth in Revenue. The Revenue has grown by 1.47% in the last year.
The Revenue has been growing by 8.81% on average over the past years. This is quite good.
EPS 1Y (TTM)-35.33%
EPS 3Y-3.4%
EPS 5Y-2.87%
EPS Q2Q%-93.33%
Revenue 1Y (TTM)1.47%
Revenue growth 3Y9.79%
Revenue growth 5Y8.81%
Sales Q2Q%2.08%
3.2 Future
Based on estimates for the next years, NSP will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.65% on average per year.
The Revenue is expected to grow by 7.27% on average over the next years.
EPS Next Y0.77%
EPS Next 2Y10.73%
EPS Next 3Y9.65%
EPS Next 5YN/A
Revenue Next Year5.11%
Revenue Next 2Y6.44%
Revenue Next 3Y7.27%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 23.77, NSP is valued on the expensive side.
The rest of the industry has a similar Price/Earnings ratio as NSP.
Compared to an average S&P500 Price/Earnings ratio of 29.63, NSP is valued at the same level.
A Price/Forward Earnings ratio of 23.59 indicates a rather expensive valuation of NSP.
The rest of the industry has a similar Price/Forward Earnings ratio as NSP.
When comparing the Price/Forward Earnings ratio of NSP to the average of the S&P500 Index (22.68), we can say NSP is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.77 | ||
| Fwd PE | 23.59 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NSP is on the same level as its industry peers.
NSP's Price/Free Cash Flow ratio is rather cheap when compared to the industry. NSP is cheaper than 98.73% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.55 | ||
| EV/EBITDA | 15.67 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates NSP does not grow enough to justify the current Price/Earnings ratio.
NSP has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)30.72
PEG (5Y)N/A
EPS Next 2Y10.73%
EPS Next 3Y9.65%
5. Dividend
5.1 Amount
NSP has a Yearly Dividend Yield of 2.74%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 1.93, NSP pays a better dividend. On top of this NSP pays more dividend than 93.67% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, NSP has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.74% |
5.2 History
The dividend of NSP is nicely growing with an annual growth rate of 14.57%!
NSP has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of NSP decreased recently.
Dividend Growth(5Y)14.57%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
NSP pays out 97.80% of its income as dividend. This is not a sustainable payout ratio.
NSP's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP97.8%
EPS Next 2Y10.73%
EPS Next 3Y9.65%
84.85
-1.78 (-2.05%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners96.66%
Inst Owner Change1.98%
Ins Owners5.35%
Ins Owner Change-8.32%
Market Cap3.16B
Analysts50
Price Target95.54 (12.6%)
Short Float %5.38%
Short Ratio4.25
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.74% |
Yearly Dividend2.39
Dividend Growth(5Y)14.57%
DP97.8%
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)96.74%
Min EPS beat(2)18.45%
Max EPS beat(2)175.03%
EPS beat(4)4
Avg EPS beat(4)54.17%
Min EPS beat(4)5.77%
Max EPS beat(4)175.03%
EPS beat(8)7
Avg EPS beat(8)32.09%
EPS beat(12)11
Avg EPS beat(12)28.29%
EPS beat(16)14
Avg EPS beat(16)21.19%
Revenue beat(2)0
Avg Revenue beat(2)-0.57%
Min Revenue beat(2)-1.14%
Max Revenue beat(2)0%
Revenue beat(4)0
Avg Revenue beat(4)-1.07%
Min Revenue beat(4)-1.83%
Max Revenue beat(4)0%
Revenue beat(8)1
Avg Revenue beat(8)-0.71%
Revenue beat(12)3
Avg Revenue beat(12)-0.69%
Revenue beat(16)7
Avg Revenue beat(16)0.6%
PT rev (1m)0%
PT rev (3m)-16.46%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.77 | ||
| Fwd PE | 23.59 | ||
| P/S | 0.48 | ||
| P/FCF | 6.55 | ||
| P/OCF | 6.07 | ||
| P/B | 32.57 | ||
| P/tB | 37.61 | ||
| EV/EBITDA | 15.67 |
EPS(TTM)3.57
EY4.21%
EPS(NY)3.6
Fwd EY4.24%
FCF(TTM)12.95
FCFY15.26%
OCF(TTM)13.97
OCFY16.46%
SpS176.77
BVpS2.61
TBVpS2.26
PEG (NY)30.72
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.5% | ||
| ROE | 93.81% | ||
| ROCE | 17.54% | ||
| ROIC | 13.01% | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | 1.78% | ||
| PM (TTM) | 1.38% | ||
| GM | 15.99% | ||
| FCFM | 7.32% |
ROA(3y)6.8%
ROA(5y)7.23%
ROE(3y)165.84%
ROE(5y)N/A
ROIC(3y)21.27%
ROIC(5y)21.13%
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)28.67%
ROCE(5y)28.48%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3Y-20.09%
OM growth 5Y-16.29%
PM growth 3Y-17.82%
PM growth 5Y-16.76%
GM growth 3Y-1.03%
GM growth 5Y-1.21%
F-Score6
Asset Turnover2.53
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.8 | ||
| Debt/FCF | 0.77 | ||
| Debt/EBITDA | 2.29 | ||
| Cap/Depr | 86.36% | ||
| Cap/Sales | 0.58% | ||
| Interest Coverage | 3.66 | ||
| Cash Conversion | 322.98% | ||
| Profit Quality | 529.67% | ||
| Current Ratio | 1.08 | ||
| Quick Ratio | 1.08 | ||
| Altman-Z | 3.93 |
F-Score6
WACC9.22%
ROIC/WACC1.41
Cap/Depr(3y)84.91%
Cap/Depr(5y)130.99%
Cap/Sales(3y)0.57%
Cap/Sales(5y)0.93%
Profit Quality(3y)266.33%
Profit Quality(5y)232.59%
High Growth Momentum
Growth
EPS 1Y (TTM)-35.33%
EPS 3Y-3.4%
EPS 5Y-2.87%
EPS Q2Q%-93.33%
EPS Next Y0.77%
EPS Next 2Y10.73%
EPS Next 3Y9.65%
EPS Next 5YN/A
Revenue 1Y (TTM)1.47%
Revenue growth 3Y9.79%
Revenue growth 5Y8.81%
Sales Q2Q%2.08%
Revenue Next Year5.11%
Revenue Next 2Y6.44%
Revenue Next 3Y7.27%
Revenue Next 5YN/A
EBIT growth 1Y-46.47%
EBIT growth 3Y-12.27%
EBIT growth 5Y-8.91%
EBIT Next Year69.16%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y204.35%
FCF growth 3Y28.47%
FCF growth 5Y26.48%
OCF growth 1Y161.98%
OCF growth 3Y25.96%
OCF growth 5Y20.44%