Head-To-Head Comparison: Heidrick & Struggles International (HSII) & Kforce (KFRC)

Kforce (NASDAQ: KFRC) and Heidrick & Struggles International (NASDAQ:HSII) are both small-cap business services companies, but which is the better stock? We will compare the two companies based on the strength of their profitabiliy, dividends, valuation, risk, institutional ownership, analyst recommendations and earnings.

Valuation & Earnings

This table compares Kforce and Heidrick & Struggles International’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Kforce $1.33 billion 0.35 $73.79 million $1.34 13.88
Heidrick & Struggles International $592.21 million 0.69 $56.79 million $0.78 27.88

Kforce has higher revenue and earnings than Heidrick & Struggles International. Kforce is trading at a lower price-to-earnings ratio than Heidrick & Struggles International, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

77.7% of Kforce shares are held by institutional investors. Comparatively, 86.4% of Heidrick & Struggles International shares are held by institutional investors. 13.3% of Kforce shares are held by company insiders. Comparatively, 2.4% of Heidrick & Struggles International shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Kforce and Heidrick & Struggles International, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kforce 0 3 2 0 2.40
Heidrick & Struggles International 0 1 0 0 2.00

Kforce presently has a consensus price target of $23.67, suggesting a potential upside of 27.24%. Heidrick & Struggles International has a consensus price target of $27.00, suggesting a potential upside of 24.14%. Given Kforce’s stronger consensus rating and higher probable upside, analysts plainly believe Kforce is more favorable than Heidrick & Struggles International.

Dividends

Kforce pays an annual dividend of $0.48 per share and has a dividend yield of 2.6%. Heidrick & Struggles International pays an annual dividend of $0.52 per share and has a dividend yield of 2.4%. Kforce pays out 35.8% of its earnings in the form of a dividend. Heidrick & Struggles International pays out 66.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Kforce is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Kforce has a beta of 1.53, meaning that its share price is 53% more volatile than the S&P 500. Comparatively, Heidrick & Struggles International has a beta of 1.6, meaning that its share price is 60% more volatile than the S&P 500.

Profitability

This table compares Kforce and Heidrick & Struggles International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kforce 2.63% 29.68% 10.08%
Heidrick & Struggles International 2.41% 8.26% 3.99%

Summary

Kforce beats Heidrick & Struggles International on 12 of the 16 factors compared between the two stocks.

Kforce Company Profile

Kforce Inc. (Kforce) is engaged in providing professional and technical specialty staffing services and solutions. The Company operates through three segments, which include Technology (Tech), Finance and Accounting (FA) and Government Solutions (GS). The Company’s Tech segment includes the operations of its subsidiary Kforce Global Solutions, Inc. The FA segment is engaged in providing both temporary staffing and permanent placement services to its clients in areas, such as general accounting, business analysis and others. The GS segment is engaged in providing services and solutions to the Federal Government as both a prime contractor and a subcontractor in the fields of information technology, and finance and accounting. Kforce operates through field offices located throughout the United States and one office in Manila, the Philippines. The Company offers various staffing services that consist of temporary staffing services (Flex) and permanent placement services (Direct Hire).

Heidrick & Struggles International Company Profile

Heidrick & Struggles International, Inc. is an advisory firm providing executive search, leadership consulting and culture shaping services to businesses and business leaders around the world. Its segments include Executive Search, Leadership Consulting and Culture Shaping. It operates its executive search services in three geographic regions: the Americas (which includes the countries in North and South America); Europe (which includes the continents of Europe and Africa), and Asia Pacific (which includes Asia and the region generally known as the Middle East). Its Leadership Consulting segment operates globally. Its Culture Shaping segment operates in the Americas and Europe. In addition to executive search, it provides leadership consulting expertise and culture shaping services including executive leadership assessment; leadership, team and board development; succession planning; talent strategy; people performance; inter-team collaboration, and organizational transformation.

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