Financial Survey: Kforce (NASDAQ:KFRC) versus Science Applications International (NASDAQ:SAIC)

Science Applications International (NASDAQ:SAIC) and Kforce (NASDAQ:KFRC) are both industrials companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Earnings & Valuation

This table compares Science Applications International and Kforce”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Science Applications International	$7.26 billion	0.76	$358.00 million	$8.55	15.31
Kforce	$1.34 billion	0.68	$50.41 million	$2.12	24.10

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

Analyst Ratings

This is a summary of recent recommendations and price targets for Science Applications International and Kforce, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Science Applications International	1	8	2	0	2.09
Kforce	0	3	2	0	2.40

Science Applications International presently has a consensus price target of $125.22, indicating a potential downside of 4.36%. Kforce has a consensus price target of $60.67, indicating a potential upside of 18.75%. Given Kforce’s stronger consensus rating and higher possible upside, analysts clearly believe Kforce is more favorable than Science Applications International.

Volatility & Risk

Science Applications International has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500. Comparatively, Kforce has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500.

Institutional and Insider Ownership

76.0% of Science Applications International shares are held by institutional investors. Comparatively, 92.8% of Kforce shares are held by institutional investors. 0.7% of Science Applications International shares are held by company insiders. Comparatively, 7.3% of Kforce shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Science Applications International pays an annual dividend of $1.48 per share and has a dividend yield of 1.1%. Kforce pays an annual dividend of $1.60 per share and has a dividend yield of 3.1%. Science Applications International pays out 17.3% of its earnings in the form of a dividend. Kforce pays out 75.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Science Applications International and Kforce’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Science Applications International	5.13%	34.68%	9.45%
Kforce	3.59%	30.34%	13.76%

Summary

Kforce beats Science Applications International on 8 of the 15 factors compared between the two stocks.

About Science Applications International

Science Applications International Corporation provides technical, engineering, and enterprise information technology (IT) services primarily in the United States. The company’s offerings include engineering; technology integration; IT modernization; maintenance of ground and maritime systems; logistics; training and simulation; operation and program support services; and end-to-end services, such as design, development, integration, deployment, management and operations, sustainment, and security of its customers’ IT infrastructure, as well as cloud migration, managed services, infrastructure modernization, and enterprise IT-as-a-service solutions. It serves the U.S. military comprising Army, Air Force, Navy, Marines, and Coast Guard; Department of Defense agencies; National Aeronautics and Space Administration; the U.S. Department of State; Department of Justice; Department of Homeland Security; and various intelligence community agencies, as well as U.S. federal civilian agencies. The company was formerly known as SAIC Gemini, Inc. and changed its name to Science Applications International Corporation in September 2013. Science Applications International Corporation was founded in 1969 and is headquartered in Reston, Virginia.

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.