Business services providers use their specialized expertise to help enterprises streamline operations and cut costs. Furthermore, the demand for their offerings is rising as more clients outsource non-core functions, a trend that has enabled the industry to return 22.1% over the past six months. At the same time, the S&P 500 was up 16.6%.
Regardless of these results, investors must exercise caution as many companies in this space are sensitive to the ebbs and flows of the broader economy. Keeping that in mind, here are two services stocks boasting durable advantages and one we’re passing on.
One Business Services Stock to Sell:
ManpowerGroup (MAN)
Market Cap: $2.58 billion
Founded during the post-World War II economic boom when businesses needed temporary workers, ManpowerGroup (NYSE:MAN) connects millions of people to employment opportunities through its global network of staffing, recruitment, and workforce management services.
Why Are We Out on MAN?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.2% annually over the last five years
- Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 13.8% annually, worse than its revenue
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
At $55.62 per share, ManpowerGroup trades at 13.7x forward P/E. Read our free research report to see why you should think twice about including MAN in your portfolio.
Two Business Services Stocks to Buy:
Stride (LRN)
Market Cap: $3.21 billion
Formerly known as K12, Stride (NYSE:LRN) is an education technology company providing education solutions through digital platforms.
Why Is LRN a Good Business?
- Market share has increased this cycle as its 11.1% annual revenue growth over the last two years was exceptional
- Free cash flow margin jumped by 5.8 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
- Returns on capital are growing as management capitalizes on its market opportunities
Stride’s stock price of $77.76 implies a valuation ratio of 8.7x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Huron (HURN)
Market Cap: $2.34 billion
Founded in 2002 during a time of significant regulatory change in corporate America, Huron Consulting Group (NASDAQ:HURN) is a professional services company that helps organizations develop growth strategies, optimize operations, and implement digital transformation solutions.
Why Is HURN a Top Pick?
- Market share has increased this cycle as its 16.4% annual revenue growth over the last five years was exceptional
- Share buybacks catapulted its annual earnings per share growth to 23%, which outperformed its revenue gains over the last two years
- Free cash flow margin increased by 7.6 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Huron is trading at $156.82 per share, or 16.3x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.