Head-To-Head Analysis: Kelly Services (NASDAQ:KELYA) vs. Red Violet (NASDAQ:RDVT)

Kelly Services (NASDAQ:KELYA) and Red Violet (NASDAQ:RDVT) are both small-cap industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, profitability, institutional ownership, analyst recommendations, dividends and earnings.

Insider & Institutional Ownership

76.3% of Kelly Services shares are owned by institutional investors. Comparatively, 63.6% of Red Violet shares are owned by institutional investors. 5.4% of Kelly Services shares are owned by insiders. Comparatively, 8.9% of Red Violet shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Kelly Services and Red Violet, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kelly Services	1	1	1	0	2.00
Red Violet	0	1	5	0	2.83

Kelly Services currently has a consensus target price of $20.00, indicating a potential upside of 21.47%. Red Violet has a consensus target price of $83.50, indicating a potential upside of 5.18%. Given Kelly Services’ higher probable upside, analysts plainly believe Kelly Services is more favorable than Red Violet.

Profitability

This table compares Kelly Services and Red Violet’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%
Red Violet	16.54%	16.12%	14.77%

Volatility and Risk

Kelly Services has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500. Comparatively, Red Violet has a beta of 1.79, indicating that its share price is 79% more volatile than the S&P 500.

Valuation and Earnings

This table compares Kelly Services and Red Violet”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kelly Services	$4.25 billion	0.13	-$254.10 million	($7.81)	-2.11
Red Violet	$99.02 million	12.86	$13.15 million	$1.12	70.88

Red Violet has lower revenue, but higher earnings than Kelly Services. Kelly Services is trading at a lower price-to-earnings ratio than Red Violet, indicating that it is currently the more affordable of the two stocks.

Summary

Red Violet beats Kelly Services on 11 of the 14 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 Red Violet

Red Violet, Inc., a software and services company, specializes in proprietary technologies and applying analytical capabilities to deliver identity intelligence in the United States. It offers idiCORE, an investigative solution used to address various organizational challenges, which include due diligence, risk mitigation, identity authentication, fraud detection and prevention, customer acquisition, and regulatory compliance; and FOREWARN, an app-based solution that provides instant knowledge before face-to-face engagement with a consumer, as well as helps professionals to identify and mitigate risk. The company serves financial services, insurance, healthcare, retail, telecommunication companies, law enforcement and government agencies, collections, law, corporate security, and investigative firms. It markets its products and services through value-added distributors, resellers, and strategic partners; and trade shows and seminars, advertising, public relations, distribution of sales literature, and product specifications and ongoing communication with prospective customers, distributors, resellers, strategic partners, and installed base of current customers, as well as through direct sales. The company was incorporated in 2017 and is headquartered in Boca Raton, Florida.