BG Staffing

With the incoming administration wanting to Make America Great Again, it can be easily assumed that the economy will improve and businesses will be hiring. That's where the Staffing and Outsourcing Industry excels. While many industries will be adding full time employees, others will add part time employees and BG Staffing will be one of many companies ready to assist. 

​BG Staffing, Inc. provides temporary staffing services in the United States. The company operates through three segments: Multifamily, Professional, and Commercial. The Commercial segment provides temporary workers for various skilled and unskilled positions primarily to distribution, logistics, and call center customers in Illinois, Wisconsin, New Mexico, Texas, Tennessee, and Mississippi. The Multifamily segment offers front office and maintenance personnel to the multifamily housing industry on a temporary basis in Texas and other states. The Professional segment provides skilled temporary workers for IT customer projects, and finance and accounting needs in Texas and Louisiana. This segment also offers finance, accounting, and related support personnel. The company was formerly known as LTN Staffing, LLC and changed its name to BG Staffing, Inc. in November 2013. The company is headquartered in Plano, Texas.
​(Summary) (Company) (Chart)

BG Staffing Monthly Chart

BG Staffing Dividend History

9 January 2016
Price $13.88
1yr Target $17.57
Analysts 2
Dividend $1.00
Payout Ratio 135.13%

1yr Cap Gain 26.58%
Yield 7.20%
1yr Tot Return 33.78%

P/E 18.76
PEG 0.94
Beta ---

EPS (ttm) $0.74
EPS next yr $1.06
Forward P/E 13.16
EPS next 5yr 20.00%
1yr Price Support $21.20

Market Cap $120.48 Mil
Revenues $256.30 Mil
Earnings $6.10 Mil
Profit Margin 2.38%

Quick Ratio 1.80
Current Ratio 1.80
Debt/Equity 0.00

1yr RevGR 25.87%
3yr RevGR ---
5yr RevGR ---

1yr EarnGR ---
3yr EarnGR ---
5yr EarnGR ---

1yr DivGR 566.66%
3yr DivGR ---
5yr DivGR ---

ROA 7.40%
ROE 18.60%

My Path Forward

While BG Staffing is small, it's growing fast. Now I'm not usually interested in companies this small but this company seems to be in the right place at the right time to take advantage of a change in the economy that's about to occur, it we believe the incoming administration. 

On a fundamental basis this company looks pretty good. But there are a few detractors for my type of investing. First this company has a very small market capitalization and therefore there's always risk that companies like this can go under or be taken over before I can make a sufficient amount of money. Second, it doesn't have a long history of revenue, earnings and dividends so there's not much to assess. Finally it's payout ratio is above 100% so unless it expands its earnings quickly there's not much chance that the dividend will be increased any time soon. 

These are not small detractors for a dividend growth investor like myself, but its expected earnings per share growth rate going forward is a nice 20% and earnings next year will finally be above the dividend. 

This stock obviously got ahead of itself when the price ran up above $21 per share but with the recent pullback below $14, the shares may finally be worth accumulating. With a one year estimated share price gain of 26.58% and a total return above 33%, I think it's time to pick up a few shares of this company to monitor and see just what it can do. It's a high risk investment but if they can maneuver the upcoming changes in the economy these shares may just just produce a nice return.