Business services providers play a critical role for enterprises, assisting them with everything from new hardware integrations to consulting and marketing. But increasing competition from AI-driven upstarts has tempered enthusiasm, and over the past six months, the industry has pulled back by 3.4%. This drawdown was discouraging since the S&P 500 returned 5%.

The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. With that said, here is one services stock poised to generate sustainable market-beating returns and two we’re passing on.

Two Business Services Stocks to Sell:

UniFirst (UNF)

Market Cap: $3.24 billion

With a fleet of trucks making weekly deliveries to over 300,000 customer locations, UniFirst (NYSE: UNF) provides, rents, cleans, and maintains workplace uniforms and protective clothing for businesses across various industries.

Why Are We Wary of UNF?

1. Estimated sales growth of 1% for the next 12 months implies demand will slow from its two-year trend
2. Incremental sales over the last five years were less profitable as its earnings per share were flat while its revenue grew
3. Underwhelming 7.4% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its falling returns suggest its earlier profit pools are drying up

UniFirst is trading at $174.68 per share, or 20.7x forward P/E. Read our free research report to see why you should think twice about including UNF in your portfolio.

Maximus (MMS)

Market Cap: $4.80 billion

With nearly 50 years of experience translating public policy into operational programs that serve millions of citizens, Maximus (NYSE: MMS) provides operational services, clinical assessments, and technology solutions to government agencies in the U.S. and internationally.

Why Does MMS Give Us Pause?

1. Estimated sales growth of 1.9% for the next 12 months implies demand will slow from its two-year trend
2. Free cash flow margin shrank by 11.3 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
3. Low returns on capital reflect management’s struggle to allocate funds effectively

Maximus’s stock price of $85.48 implies a valuation ratio of 13x forward P/E. If you’re considering MMS for your portfolio, see our FREE research report to learn more.

One Business Services Stock to Watch:

Broadridge (BR)

Market Cap: $30.46 billion

Processing over $10 trillion in equity and fixed income trades daily and managing proxy voting for over 800 million equity positions, Broadridge Financial Solutions (NYSE: BR) provides technology-driven solutions that power investing, governance, and communications for banks, broker-dealers, asset managers, and public companies.

Why Is BR on Our Radar?

1. Offerings and unique value proposition resonate with customers, as seen in its above-market 8.8% annual sales growth over the last five years
2. Incremental sales over the last five years have been more profitable as its earnings per share increased by 11.2% annually, topping its revenue gains
3. Free cash flow margin expanded by 4.2 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends

At $260.06 per share, Broadridge trades at 28.2x 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

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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