Kforce (NASDAQ:KFRC – Get Free Report) and HireRight (NYSE:HRT – Get Free Report) are both small-cap business services companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, risk, earnings and dividends.
Analyst Recommendations
This is a summary of recent ratings and recommmendations for Kforce and HireRight, as provided by MarketBeat.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
Kforce | 0 | 3 | 1 | 0 | 2.25 |
HireRight | 0 | 4 | 1 | 0 | 2.20 |
Kforce presently has a consensus target price of $68.00, suggesting a potential upside of 6.25%. HireRight has a consensus target price of $12.50, suggesting a potential downside of 12.77%. Given Kforce’s stronger consensus rating and higher probable upside, analysts clearly believe Kforce is more favorable than HireRight.
Dividends
Volatility and Risk
Kforce has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500. Comparatively, HireRight has a beta of 0.17, suggesting that its stock price is 83% less volatile than the S&P 500.
Insider & Institutional Ownership
92.8% of Kforce shares are held by institutional investors. Comparatively, 12.5% of HireRight shares are held by institutional investors. 5.5% of Kforce shares are held by company insiders. Comparatively, 13.0% of HireRight shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Profitability
This table compares Kforce and HireRight’s net margins, return on equity and return on assets.
Net Margins | Return on Equity | Return on Assets | |
Kforce | 3.78% | 35.83% | 17.19% |
HireRight | N/A | N/A | N/A |
Valuation and Earnings
This table compares Kforce and HireRight’s top-line revenue, earnings per share (EPS) and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
Kforce | $1.53 billion | 0.82 | $61.08 million | $2.89 | 22.15 |
HireRight | $721.88 million | 0.06 | -$705,000.00 | ($0.25) | -57.32 |
Kforce has higher revenue and earnings than HireRight. HireRight is trading at a lower price-to-earnings ratio than Kforce, indicating that it is currently the more affordable of the two stocks.
Summary
Kforce beats HireRight on 14 of the 16 factors compared between the two stocks.
About Kforce
Kforce Inc. provides professional staffing services and solutions in the United States. It operates through two segments, Technology, and Finance and Accounting (FA). The Technology segment provides talent solutions to its clients primarily in the areas of information technology, such as systems/applications architecture and development, data management and analytics, business and artificial intelligence, machine learning, project and program management, and network architecture and security. This segment serves clients in various industries comprising financial and business services, communications, insurance, retail, and technology industries. The FA businesses segment offers talent solutions to its clients in areas, including financial planning and analysis, business intelligence analysis, general accounting, transactional accounting, business and cost analysis, and taxation and treasury. It also provides consultants in lower skilled areas comprising loan servicing and support, customer and call center support, data entry, and other administrative roles. This segment serves clients in various industries, including financial and business services, healthcare, and manufacturing sectors. The company was founded in 1962 and is headquartered in Tampa, Florida.
About HireRight
HireRight Holdings Corporation provides technology-driven workforce risk management and compliance solutions worldwide. It offers background screening, verification, identification, monitoring, and drug and health screening services for customers under the HireRight brand name. The company provides its services through software and data platform that integrates into its customers' human capital management systems enabling workflows for workforce hiring, onboarding, and monitoring. It serves transportation, healthcare, technology, financial services, business and consumer services, manufacturing, education, and retail industries, as well as not-for-profit organizations. HireRight Holdings Corporation was incorporated in 1990 and is headquartered in Nashville, Tennessee.
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