Kforce (NASDAQ:KFRC) vs. HireRight (NYSE:HRT) Critical Survey

HireRight (NYSE:HRT) and Kforce (NASDAQ:KFRC) are both small-cap industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, earnings, analyst recommendations, institutional ownership, dividends, valuation and risk.

Risk and Volatility

HireRight has a beta of 0.17, indicating that its stock price is 83% less volatile than the S&P 500. Comparatively, Kforce has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500.

Institutional & Insider Ownership

12.5% of HireRight shares are owned by institutional investors. Comparatively, 92.8% of Kforce shares are owned by institutional investors. 13.0% of HireRight shares are owned by company insiders. Comparatively, 5.3% of Kforce shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for HireRight and Kforce, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HireRight	0	4	1	0	2.20
Kforce	0	3	1	0	2.25

HireRight currently has a consensus target price of $12.50, suggesting a potential downside of 12.71%. Kforce has a consensus target price of $68.33, suggesting a potential upside of 6.39%. Given Kforce’s stronger consensus rating and higher probable upside, analysts plainly believe Kforce is more favorable than HireRight.

Earnings & Valuation

This table compares HireRight and Kforce’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HireRight	$721.88 million	0.06	-$705,000.00	($0.25)	-57.28
Kforce	$1.53 billion	0.82	$61.08 million	$3.13	20.52

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.

Dividends

HireRight pays an annual dividend of $0.12 per share and has a dividend yield of 0.8%. Kforce pays an annual dividend of $1.52 per share and has a dividend yield of 2.4%. HireRight pays out -48.0% of its earnings in the form of a dividend. Kforce pays out 48.6% 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 has increased its dividend for 5 consecutive years. Kforce is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares HireRight and Kforce’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HireRight	N/A	N/A	N/A
Kforce	3.99%	38.24%	18.37%

Summary

Kforce beats HireRight on 14 of the 16 factors compared between the two stocks.

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.

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.