Business services providers thrive by solving complex operational challenges for their clients, allowing them to focus on their secret sauce. Furthermore, the demand for their offerings is rising as more clients outsource non-core functions, a trend that has enabled the industry to return 19.8% over the past six months. At the same time, the S&P 500 was up 11.7%.
Nevertheless, investors should tread carefully as many companies in this space are cyclical due to their reliance on corporate spending budgets. Keeping that in mind, here are two resilient services stocks at the top of our wish list and one we’re steering clear of.
One Business Services Stock to Sell:
IBM (IBM)
Market Cap: $221.1 billion
With a corporate history spanning over a century and once known for its iconic mainframe computers, IBM (NYSE: IBM) provides hybrid cloud computing platforms, AI solutions, consulting services, and enterprise infrastructure to help businesses modernize their operations.
Why Are We Cautious About IBM?
- The company has faced growth challenges as its 4.3% annual revenue increases over the last five years fell short of other business services companies
- Projected sales growth of 4.1% for the next 12 months suggests sluggish demand
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 8.6% annually
IBM is trading at $234.09 per share, or 18.1x forward P/E. Dive into our free research report to see why there are better opportunities than IBM.
Two Business Services Stocks to Watch:
MSA Safety (MSA)
Market Cap: $7.24 billion
Founded in 1914 as Mine Safety Appliances to protect coal miners from dangerous gases, MSA Safety (NYSE: MSA) designs and manufactures advanced safety products that protect workers and facilities across industries including fire service, energy, construction, and manufacturing.
Why Could MSA Be a Winner?
- Adjusted operating margin improvement of 4.3 percentage points over the last five years demonstrates its ability to scale efficiently
- Share buybacks catapulted its annual earnings per share growth to 15.6%, which outperformed its revenue gains over the last five years
- Free cash flow margin increased by 10.5 percentage points over the last five years, giving the company more capital to invest or return to shareholders
MSA Safety’s stock price of $187.86 implies a valuation ratio of 19.7x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Brink's (BCO)
Market Cap: $4.38 billion
Known for its iconic armored trucks that have been a fixture in American cities since 1859, Brink's (NYSE: BCO) provides secure transportation and management of cash and valuables for banks, retailers, and other businesses worldwide.
Why Are We Positive on BCO?
- Economies of scale give it some operating leverage when demand rises
- Share buybacks catapulted its annual earnings per share growth to 13.7%, which outperformed its revenue gains over the last five years
- Returns on capital are climbing as management makes more lucrative bets
At $106.27 per share, Brink's trades at 11.1x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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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-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
