Paylocity (NASDAQ:PCTY) & HireQuest (NASDAQ:HQI) Head-To-Head Review

HireQuest (NASDAQ:HQI) and Paylocity (NASDAQ:PCTY) are both industrials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Analyst Ratings

This is a summary of current recommendations for HireQuest and Paylocity, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HireQuest	0	1	2	0	2.67
Paylocity	0	5	12	0	2.71

HireQuest currently has a consensus target price of $19.00, indicating a potential upside of 18.23%. Paylocity has a consensus target price of $160.53, indicating a potential upside of 2.89%. Given HireQuest’s higher possible upside, analysts plainly believe HireQuest is more favorable than Paylocity.

Institutional & Insider Ownership

12.0% of HireQuest shares are owned by institutional investors. Comparatively, 94.8% of Paylocity shares are owned by institutional investors. 42.9% of HireQuest shares are owned by company insiders. Comparatively, 19.4% of Paylocity shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares HireQuest and Paylocity”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HireQuest	$30.64 million	7.29	$6.33 million	$0.57	28.19
Paylocity	$1.77 billion	4.67	$269.74 million	$4.95	31.52

Paylocity has higher revenue and earnings than HireQuest. HireQuest is trading at a lower price-to-earnings ratio than Paylocity, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

HireQuest has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500. Comparatively, Paylocity has a beta of 0.48, indicating that its stock price is 52% less volatile than the S&P 500.

Profitability

This table compares HireQuest and Paylocity’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HireQuest	27.06%	16.35%	12.11%
Paylocity	15.23%	27.02%	5.78%

Summary

Paylocity beats HireQuest on 8 of the 14 factors compared between the two stocks.

About HireQuest

HireQuest, Inc. provides temporary staffing services in the United States. It offers staffing services, including direct-dispatch, executive search, consultant, unskilled and semi-skilled industrial and construction personnel, clerical and administrative personnel, and permanent placement services, as well as commercial and non-CDL drivers, and skilled personnel in the medical and dental industries. The company provides its services under the HireQuest Direct, HireQuest, SNelling, DriverQuest, HireQuest Health, Northbound Executive Search, and MRI trade names. It serves construction, recycling, warehousing, logistics, auctioneering, manufacturing, hospitality, landscaping, and retail industries, as well as dental practices. HireQuest, Inc. was founded in 2002 and is headquartered in Goose Creek, South Carolina.

About Paylocity

Paylocity Holding Corporation engages in the provision of cloud-based human capital management and payroll software solutions for workforce in the United States. The company offers payroll software solution for global payroll, expense management, tax services, on demand payment, and garnishment managed services; and time and labor management software for time and attendance, scheduling, and time collection. It also provides human resources (HR) software solutions for employee self-service, compliance, HR edge, data analytics, and workflows and documents, as well as human resource management system; talent management system for recruiting, onboarding, performance, compensation, and learning; and benefits administration software. In addition, the company offers employee experience platform for community, employee voice, recognition and rewards, video, and modern workforce index; HR reporting software; and mobile HR solutions. Further, it provides implementation and training, client, and tax and regulatory services. The company serves for-profit and non-profit organizations across industries, including business services, financial services, healthcare, manufacturing, restaurants, retail, technology, and others. It sells its products through sales representatives. The company was founded in 1997 and is headquartered in Schaumburg, Illinois.