Business services providers play a critical role for enterprises, assisting them with everything from new hardware integrations to consulting and marketing. But cutbacks in corporate spending and the threat of new AI products have kept sentiment in check, and over the past six months, the industry’s 8.2% return has trailed the S&P 500 by 5.1 percentage points.

Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. Taking that into account, here are two services stocks we think can generate sustainable market-beating returns and one best left ignored.

One Business Services Stock to Sell:

Iridium (IRDM)

Market Cap: $1.82 billion

With a constellation of 66 low-earth orbit satellites providing coverage to every inch of the planet, Iridium Communications (NASDAQ: IRDM) operates a global satellite network that provides voice and data services to customers in remote areas where traditional telecommunications are unavailable.

Why Does IRDM Give Us Pause?

1. Estimated sales growth of 2.3% for the next 12 months implies demand will slow from its two-year trend
2. 4.8 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
3. Underwhelming 5.2% return on capital reflects management’s difficulties in finding profitable growth opportunities

Iridium’s stock price of $17.40 implies a valuation ratio of 14.6x forward P/E. Dive into our free research report to see why there are better opportunities than IRDM.

Two Business Services Stocks to Watch:

EXL (EXLS)

Market Cap: $6.80 billion

Originally founded as an outsourcing company in 1999 before evolving into a technology-focused enterprise, EXL (NASDAQ: EXLS) provides data analytics and AI-powered digital operations solutions that help businesses transform their operations and make better decisions.

Why Will EXLS Beat the Market?

1. Market share has increased this cycle as its 16% annual revenue growth over the last five years was exceptional
2. Share buybacks catapulted its annual earnings per share growth to 24.4%, which outperformed its revenue gains over the last five years
3. Industry-leading 21% return on capital demonstrates management’s skill in finding high-return investments

At $43.30 per share, EXL trades at 20.7x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.

Marsh & McLennan (MMC)

Market Cap: $91.91 billion

With roots dating back to 1871 and a presence in over 130 countries, Marsh & McLennan (NYSE: MMC) is a global professional services firm that helps organizations manage risk, strategy, and workforce challenges through its four specialized businesses.

Why Are We Positive On MMC?

1. Dominant market position is represented by its $26.45 billion in revenue and gives it fixed cost leverage when sales grow
2. Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
3. Robust free cash flow margin of 16.2% gives it many options for capital deployment, and its growing cash flow gives it even more resources to deploy

Marsh & McLennan is trading at $187.37 per share, or 18.4x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.

Stocks We Like Even More

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% 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.