Korn/Ferry International (NYSE:KFY) and Kelly Services (NASDAQ:KELYB) Financial Survey
by Mitch Edgeman · The Markets DailyKorn/Ferry International (NYSE:KFY – Get Free Report) and Kelly Services (NASDAQ:KELYB – Get Free Report) are both business services companies, but which is the better investment? We will compare the two companies based on the strength of their risk, earnings, institutional ownership, dividends, analyst recommendations, valuation and profitability.
Dividends
Korn/Ferry International pays an annual dividend of $2.20 per share and has a dividend yield of 3.2%. Kelly Services pays an annual dividend of $0.30 per share and has a dividend yield of 1.4%. Korn/Ferry International pays out 42.0% of its earnings in the form of a dividend. Kelly Services pays out -3.9% 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. Korn/Ferry International has raised its dividend for 5 consecutive years. Korn/Ferry International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk and Volatility
Korn/Ferry International has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500. Comparatively, Kelly Services has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent ratings and recommmendations for Korn/Ferry International and Kelly Services, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Korn/Ferry International | 0 | 1 | 4 | 0 | 2.80 |
| Kelly Services | 1 | 0 | 0 | 0 | 1.00 |
Korn/Ferry International currently has a consensus price target of $78.50, indicating a potential upside of 12.72%. Given Korn/Ferry International’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Korn/Ferry International is more favorable than Kelly Services.
Insider and Institutional Ownership
98.8% of Korn/Ferry International shares are held by institutional investors. Comparatively, 0.2% of Kelly Services shares are held by institutional investors. 1.0% of Korn/Ferry International shares are held by company insiders. Comparatively, 93.1% of Kelly Services 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 Korn/Ferry International and Kelly Services’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Korn/Ferry International | 9.44% | 14.34% | 7.31% |
| Kelly Services | -6.44% | 3.07% | 1.41% |
Earnings and Valuation
This table compares Korn/Ferry International and Kelly Services”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Korn/Ferry International | $2.94 billion | 1.21 | $277.43 million | $5.24 | 13.29 |
| Kelly Services | $4.25 billion | 0.18 | -$254.10 million | ($7.60) | -2.84 |
Korn/Ferry International has higher earnings, but lower revenue than Kelly Services. Kelly Services is trading at a lower price-to-earnings ratio than Korn/Ferry International, indicating that it is currently the more affordable of the two stocks.
Summary
Korn/Ferry International beats Kelly Services on 14 of the 17 factors compared between the two stocks.
About Korn/Ferry International
Korn Ferry, together with its subsidiaries, provides organizational consulting services worldwide. It operates through four segments: Consulting, Digital, Executive Search, and Recruitment Process Outsourcing (RPO) & Professional Search. The company provides executive search services to recruit board level, chief executive, other senior executive, and general management talent of organizations. It also offers organizational strategy, assessment and succession, leadership and professional development, and total reward services. In addition, the company provides RPO, business project, professional search, and outsource recruiting solutions. Further, the company offers tech-enabled solutions that identify structures, roles, capabilities, and behaviors to drive businesses. It serves public and private companies, and middle market and emerging growth companies, as well as government and non-profit organizations. The company was formerly known as Korn/Ferry International and changed its name to Korn Ferry in January 2019. Korn Ferry was founded in 1969 and is based in Los Angeles, California.
About Kelly Services
Kelly Services, Inc. engages in staffing and workforce solutions. It operates through the following segments: Americas Staffing, Global Talent Solutions, and International Staffing. The Americas Staffing segment delivers temporary staffing, as well as direct-hire placement services, in a number of specialty staffing services, including office, education, marketing, electronic assembly, light industrial, science, engineering, and information technology in United States, Puerto Rico, Canada, Mexico and Brazil. The Global Talent Solutions segment offers outsourcing, consulting, and centrally delivered staffing business. The International Staffing segment relates to branch-delivered staffing business in the Europe, Middle East, and Africa region, as well as in the Asia Pacific. The company was founded by William Russell Kelly on October 7, 1946 and is headquartered in Troy, MI.