Kelly Services (NASDAQ:KELYA – Get Free Report) and IBEX (NASDAQ:IBEX – Get Free Report) are both small-cap industrials companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for Kelly Services and IBEX, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Kelly Services | 1 | 1 | 1 | 0 | 2.00 |
| IBEX | 0 | 2 | 1 | 0 | 2.33 |
Kelly Services currently has a consensus target price of $20.00, indicating a potential upside of 32.10%. IBEX has a consensus target price of $42.00, indicating a potential downside of 8.00%. Given Kelly Services’ higher probable upside, analysts clearly believe Kelly Services is more favorable than IBEX.
Volatility and Risk
Kelly Services has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, IBEX has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500.
Profitability
This table compares Kelly Services and IBEX’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Kelly Services | -6.73% | 2.69% | 1.19% |
| IBEX | 7.19% | 28.96% | 15.36% |
Institutional and Insider Ownership
76.3% of Kelly Services shares are held by institutional investors. Comparatively, 81.2% of IBEX shares are held by institutional investors. 5.4% of Kelly Services shares are held by company insiders. Comparatively, 3.4% of IBEX shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares Kelly Services and IBEX”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Kelly Services | $4.25 billion | 0.12 | -$254.10 million | ($7.81) | -1.94 |
| IBEX | $644.08 million | 0.94 | $46.33 million | $3.13 | 14.58 |
IBEX has lower revenue, but higher earnings than Kelly Services. Kelly Services is trading at a lower price-to-earnings ratio than IBEX, indicating that it is currently the more affordable of the two stocks.
Summary
IBEX beats Kelly Services on 9 of the 13 factors compared between the two stocks.
About Kelly Services
Kelly Services, Inc., together with its subsidiaries, provides workforce solutions to various industries. The company operates through five segments: Professional & Industrial; Science, Engineering & Technology; Education; Outsourcing & Consulting; and International. The Professional & Industrial segment delivers staffing, outcome-based, and permanent placement services providing administrative, accounting, and finance; light industrial; contact center staffing; and other workforce solutions. The Science, Engineering & Technology segment offers staffing, outcome-based, and permanent placement services in the areas of science and clinical research, engineering, technology, and telecommunications specialties. The Education segment provides staffing, permanent placement, and executive search services to pre-K-12 school districts and education organizations. The Outsourcing & Consulting segment offers managed service provider, recruitment process outsourcing, payroll process outsourcing, and executive coaching programs to customers on a global basis that includes its RocketPower brand. The International segment provides staffing, recruitment process outsourcing, and permanent placement services. The company serves customers in the United States, Canada, Mexico, Puerto Rico, France, Switzerland, Portugal, Russia, Italy, rest of Europe, and the Asia-Pacific region. Kelly Services, Inc. was founded in 1946 and is headquartered in Troy, Michigan.
About IBEX
IBEX Limited provides end-to-end technology-enabled customer lifecycle experience solutions in the United States and internationally. The company products and services portfolio includes ibex Connect, that offers customer service, technical support, revenue generation, and other revenue generation outsourced back-office services through the CX model, which integrates voice, email, chat, SMS, social media, and other communication applications; ibex Digital, a customer acquisition solution that comprises digital marketing, e-commerce technology, and platform solutions; and ibex CX, a customer experience solution, which provides a suite of proprietary software tools to measure, monitor, and manage its clients' customer experience. It operates customer engagement and customer acquisition delivery centers. The company serves banking and financial services, delivery and logistics, health tech and wellness, high tech, retail and e-commerce, streaming and entertainment, travel and hospitality, and utility industries. The company was formerly known as IBEX Holdings Limited and changed its name to IBEX Limited in September 2019. IBEX Limited was incorporated in 2017 and is headquartered in Washington, District of Columbia. The company is a subsidiary of The Resource Group International Limited.
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