Critical Review: Kforce (KFRC) & Its Competitors

Kforce (NASDAQ:KFRC) is one of 203 publicly-traded companies in the “Professional Services” industry, but how does it weigh in compared to its peers? We will compare Kforce to related companies based on the strength of its valuation, earnings, analyst recommendations, institutional ownership, risk, dividends and profitability.

Dividends

Kforce pays an annual dividend of $1.60 per share and has a dividend yield of 2.8%. Kforce pays out 66.9% of its earnings in the form of a dividend. As a group, “Professional Services” companies pay a dividend yield of 2.5% and pay out -117.7% of their earnings in the form of a dividend.

Risk & Volatility

Kforce has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, Kforce’s peers have a beta of 0.99, suggesting that their average stock price is 1% less volatile than the S&P 500.

Profitability

This table compares Kforce and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kforce	3.59%	30.34%	13.76%
Kforce Competitors	-0.60%	20.41%	4.31%

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kforce	0	3	2	0	2.40
Kforce Competitors	1583	6444	9166	430	2.48

Kforce presently has a consensus price target of $63.00, indicating a potential upside of 9.93%. As a group, “Professional Services” companies have a potential upside of 27.44%. Given Kforce’s peers stronger consensus rating and higher probable upside, analysts plainly believe Kforce has less favorable growth aspects than its peers.

Valuation & Earnings

This table compares Kforce and its peers gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Kforce	$1.37 billion	$50.41 million	23.98
Kforce Competitors	$3.39 billion	$228.36 million	35.55

Kforce’s peers have higher revenue and earnings than Kforce. Kforce is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Institutional & Insider Ownership

92.8% of Kforce shares are owned by institutional investors. Comparatively, 57.4% of shares of all “Professional Services” companies are owned by institutional investors. 7.3% of Kforce shares are owned by insiders. Comparatively, 17.1% of shares of all “Professional Services” companies are owned 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.

Summary

Kforce peers beat Kforce on 10 of the 15 factors compared.

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.