Financial Analysis: SS&C Technologies (NASDAQ:SSNC) & Kelly Services (NASDAQ:KELYA)

SS&C Technologies (NASDAQ:SSNC) and Kelly Services (NASDAQ:KELYA) are both industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, dividends, valuation, analyst recommendations, institutional ownership, risk and profitability.

Profitability

This table compares SS&C Technologies and Kelly Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SS&C Technologies	13.16%	21.20%	7.19%
Kelly Services	-6.73%	2.69%	1.19%

Valuation & Earnings

This table compares SS&C Technologies and Kelly Services”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SS&C Technologies	$6.27 billion	2.99	$796.90 million	$3.48	23.00
Kelly Services	$4.25 billion	0.13	-$254.10 million	($7.81)	-2.08

SS&C Technologies has higher revenue and earnings than Kelly Services. Kelly Services is trading at a lower price-to-earnings ratio than SS&C Technologies, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations for SS&C Technologies and Kelly Services, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SS&C Technologies	0	3	6	1	2.80
Kelly Services	1	1	1	0	2.00

SS&C Technologies currently has a consensus price target of $92.62, suggesting a potential upside of 15.72%. Kelly Services has a consensus price target of $20.00, suggesting a potential upside of 23.30%. Given Kelly Services’ higher possible upside, analysts clearly believe Kelly Services is more favorable than SS&C Technologies.

Insider and Institutional Ownership

96.9% of SS&C Technologies shares are held by institutional investors. Comparatively, 76.3% of Kelly Services shares are held by institutional investors. 16.0% of SS&C Technologies shares are held by insiders. Comparatively, 5.4% of Kelly Services shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

SS&C Technologies has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500. Comparatively, Kelly Services has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500.

Dividends

SS&C Technologies pays an annual dividend of $1.20 per share and has a dividend yield of 1.5%. Kelly Services pays an annual dividend of $0.30 per share and has a dividend yield of 1.8%. SS&C Technologies pays out 34.5% of its earnings in the form of a dividend. Kelly Services pays out -3.8% 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. SS&C Technologies has raised its dividend for 9 consecutive years. Kelly Services is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

SS&C Technologies beats Kelly Services on 15 of the 18 factors compared between the two stocks.

About SS&C Technologies

SS&C Technologies Holdings, Inc. engages in the development and provision of software solutions to the financial services and healthcare industries. It operates through the following geographical segments: United States, Europe, Middle East and Africa, Asia Pacific and Japan, Canada, and the Americas, excluding the United States and Canada. Its products include advent genesis, antares, asset allocators, AWD, axys, BANC mall, BRIX, DST vision, evare, lightning, and moxy. The company was founded by William Charles Stone in March 1986 and is headquartered in Windsor, CT.

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.