Comparing HireQuest (NASDAQ:HQI) & Korn/Ferry International (NYSE:KFY)

HireQuest (NASDAQ:HQI) and Korn/Ferry International (NYSE:KFY) are both business services companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, institutional ownership and risk.

Institutional & Insider Ownership

12.0% of HireQuest shares are owned by institutional investors. Comparatively, 98.8% of Korn/Ferry International shares are owned by institutional investors. 43.5% of HireQuest shares are owned by company insiders. Comparatively, 1.0% of Korn/Ferry International shares are owned by company 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.

Profitability

This table compares HireQuest and Korn/Ferry International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HireQuest	7.47%	13.88%	9.35%
Korn/Ferry International	8.91%	14.49%	7.21%

Volatility & Risk

HireQuest has a beta of 1.22, suggesting that its share price is 22% more volatile than the S&P 500. Comparatively, Korn/Ferry International has a beta of 1.47, suggesting that its share price is 47% more volatile than the S&P 500.

Dividends

HireQuest pays an annual dividend of $0.24 per share and has a dividend yield of 2.5%. Korn/Ferry International pays an annual dividend of $1.92 per share and has a dividend yield of 2.6%. HireQuest pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Korn/Ferry International pays out 41.6% of its earnings in the form of a dividend. Korn/Ferry International has increased its dividend for 5 consecutive years. Korn/Ferry International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent ratings and price targets for HireQuest and Korn/Ferry International, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HireQuest	0	0	1	0	3.00
Korn/Ferry International	0	1	1	0	2.50

HireQuest currently has a consensus target price of $13.00, suggesting a potential upside of 34.03%. Korn/Ferry International has a consensus target price of $81.00, suggesting a potential upside of 7.85%. Given HireQuest’s stronger consensus rating and higher possible upside, equities analysts clearly believe HireQuest is more favorable than Korn/Ferry International.

Valuation & Earnings

This table compares HireQuest and Korn/Ferry International”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HireQuest	$34.60 million	3.95	$3.67 million	$0.18	53.88
Korn/Ferry International	$2.76 billion	1.42	$246.06 million	$4.62	16.26

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

Summary

Korn/Ferry International beats HireQuest on 10 of the 16 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 Korn/Ferry International

Korn Ferry, together with its subsidiaries, provides organizational consulting services worldwide. It operates through four segments: Consulting, Digital, Executive Search, and Recruitment Process Outsourcing (RPO) & Professional Search. The company provides executive search services to recruit board level, chief executive, other senior executive, and general management talent of organizations. It also offers organizational strategy, assessment and succession, leadership and professional development, and total reward services. In addition, the company provides RPO, business project, professional search, and outsource recruiting solutions. Further, the company offers tech-enabled solutions that identify structures, roles, capabilities, and behaviors to drive businesses. It serves public and private companies, and middle market and emerging growth companies, as well as government and non-profit organizations. The company was formerly known as Korn/Ferry International and changed its name to Korn Ferry in January 2019. Korn Ferry was founded in 1969 and is based in Los Angeles, California.