HireRight (NYSE:HRT) vs. Kforce (NASDAQ:KFRC) Head-To-Head Analysis

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Kforce	3.78%	35.83%	17.19%
HireRight	N/A	N/A	N/A

Analyst Recommendations

This is a summary of recent recommendations for Kforce and HireRight, as provided by MarketBeat.

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

Kforce presently has a consensus target price of $68.00, indicating a potential upside of 8.31%. HireRight has a consensus target price of $12.50, indicating a potential downside of 12.59%. Given Kforce’s stronger consensus rating and higher possible upside, research analysts clearly believe Kforce is more favorable than HireRight.

Insider & Institutional Ownership

92.8% of Kforce shares are held by institutional investors. Comparatively, 12.5% of HireRight shares are held by institutional investors. 5.3% of Kforce shares are held by insiders. Comparatively, 13.0% of HireRight shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kforce	$1.53 billion	0.80	$61.08 million	$2.89	21.72
HireRight	$721.88 million	0.06	-$705,000.00	($0.25)	-57.20

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

Kforce pays an annual dividend of $1.52 per share and has a dividend yield of 2.4%. HireRight pays an annual dividend of $0.12 per share and has a dividend yield of 0.8%. Kforce pays out 52.6% of its earnings in the form of a dividend. HireRight pays out -48.0% 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.

Risk & Volatility

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

Summary

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

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.

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.