Staffing 360 Solutions (NASDAQ: STAF) and Kforce (NASDAQ:KFRC) are both small-cap business services companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, institutional ownership, profitability, earnings, dividends, risk and analyst recommendations.

Dividends

Kforce pays an annual dividend of $0.48 per share and has a dividend yield of 2.7%. Staffing 360 Solutions does not pay a dividend. Kforce pays out 35.0% of its earnings in the form of a dividend.

Insider & Institutional Ownership

2.6% of Staffing 360 Solutions shares are owned by institutional investors. Comparatively, 80.8% of Kforce shares are owned by institutional investors. 13.8% of Staffing 360 Solutions shares are owned by insiders. Comparatively, 13.3% of Kforce shares are owned 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.

Earnings & Valuation

This table compares Staffing 360 Solutions and Kforce’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Staffing 360 Solutions $185.13 million 0.05 $1.96 million ($0.69) -0.88
Kforce $1.34 billion 0.35 $73.75 million $1.37 12.96

Kforce has higher revenue and earnings than Staffing 360 Solutions. Staffing 360 Solutions is trading at a lower price-to-earnings ratio than Kforce, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Staffing 360 Solutions and Kforce, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Staffing 360 Solutions 0 0 0 1 4.00
Kforce 0 3 2 0 2.40

Staffing 360 Solutions currently has a consensus target price of $2.00, indicating a potential upside of 227.92%. Kforce has a consensus target price of $24.67, indicating a potential upside of 38.97%. Given Staffing 360 Solutions’ stronger consensus rating and higher probable upside, analysts clearly believe Staffing 360 Solutions is more favorable than Kforce.

Profitability

This table compares Staffing 360 Solutions and Kforce’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Staffing 360 Solutions -3.78% -83.07% -12.31%
Kforce 2.64% 29.67% 10.02%

Volatility and Risk

Staffing 360 Solutions has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500. Comparatively, Kforce has a beta of 1.54, indicating that its share price is 54% more volatile than the S&P 500.

Summary

Kforce beats Staffing 360 Solutions on 11 of the 16 factors compared between the two stocks.

About Staffing 360 Solutions

Staffing 360 Solutions, Inc. operates in the staffing sector. The Company is engaged in the execution of a global buy-and-build strategy through the acquisition of domestic and international staffing organizations in the United States and the United Kingdom. Its targeted consolidation model is focused on the finance and accounting, administrative, engineering and information technology (IT) staffing space.

About Kforce

Kforce Inc. (Kforce) is engaged in providing professional and technical specialty staffing services and solutions. The Company operates through three segments, which include Technology (Tech), Finance and Accounting (FA) and Government Solutions (GS). The Company’s Tech segment includes the operations of its subsidiary Kforce Global Solutions, Inc. The FA segment is engaged in providing both temporary staffing and permanent placement services to its clients in areas, such as general accounting, business analysis and others. The GS segment is engaged in providing services and solutions to the Federal Government as both a prime contractor and a subcontractor in the fields of information technology, and finance and accounting. Kforce operates through field offices located throughout the United States and one office in Manila, the Philippines. The Company offers various staffing services that consist of temporary staffing services (Flex) and permanent placement services (Direct Hire).

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