Finding a publicly-traded company that will help pay off your student loans requires determining which industry will thrive in the future. That is certainly proving to be the case for the staffing group, now at $100 billion and growing. Prominent in the staffing sector is Paychex (NASDAQ: PAYX), which provides payroll and other administrative services.
It has been a good year for Paychex.
For 2013, the stock price of Paychex has jumped more than 40%. It is a money-making machine, with a profit margin of 24.50%. The average profit margin for a member of the Standard & Poor’s 500 Index is around 10%.
Paychex is Great for Shareholders
Paychex shares this money with its shareholders.
The average dividend for a member of the Standard & Poor’s 500 Index is 1.9%. Paychex pays a dividend of 3.24%. It just raised the dividend for its shareholders by 6.2%. With its history of raising its dividend, Paychex provides an income stream that should increase more in the future to those owning the stock.
If dividend income is required, there are other companies in the sector such as CDI Corporation (NYSE: CDI), Compass Diversified Holdings (NASDAQ: CODI), and Heidrick & Struggles International (NASDAQ: HSII) which all pay dividends above average. For Compass Diversified Holdings, the dividend is 7.20%. The dividend yield for CDI Corporation is 3.20%. Heidrick & Struggles International provides an income stream at a 2.80% rate to its shareholders.
Other Staffing Company Successes
There are others in the staffing industry that are also performing well, too.
While Paychex is a prominent blue chip that is rewarding its shareholders, Labor SMART (OCTBB: LTNC) is a promising small that just released guidance about what it expects to achieve in 2014 that is very bullish. Management intends to increase revenues along with the number of branch offices and states in which Labor SMART does business. What investors should be pleased with is Labor SMART’s working to increase its gross margin, too.
TrueBlue is another small-cap company that greatly rewarded its shareholders in 2013. For the year, the share price of TrueBlue has soared more than 60%. The analyst community expects earnings-per-shares to rise more than 25% in 2014.
There are a variety of factors why investments in the staffing industry should continue to be rewarding into the future.
Why Staffing Companies Are Thriving
Due to the Great Recession, many businesses are hesitant to hire full-time workers. There is still widespread concern about the stability of the economic recovery in the United States. Due to this lack of confidence in the American economy, more firms now prefer to use temporary workers.
Obamacare is also increasing the demand for the goods and services of the staffing industry. The law requires companies with more than 50 full-time employees to provide health insurance to those who work more than 30 hours a week. As a result, more and more businesses are relying on project employees.
All of these factors and more should make for a bullish future for companies such as Paychex, TrueBlue, and Labor SMART, among others in the staffing industry. Even more compelling is that this trend is taking place not just in the United States, but in many other countries, too. As an example, Robert Half International (NYSE: RHI) has more than 360 offices spanning the globe. What is in demand around the world should perform very well for investors well into the future.
What are your thoughts on staffing companies right now?
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here and here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.