Star Equity (NASDAQ:STRR – Get Free Report) and Kelly Services (NASDAQ:KELYA – Get Free Report) are both small-cap industrials companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, institutional ownership, earnings, risk and profitability.
Institutional and Insider Ownership
3.8% of Star Equity shares are held by institutional investors. Comparatively, 76.3% of Kelly Services shares are held by institutional investors. 31.6% of Star Equity shares are held by company insiders. Comparatively, 5.4% of Kelly Services shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Star Equity and Kelly Services, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Star Equity | 2 | 0 | 1 | 1 | 2.25 |
| Kelly Services | 1 | 1 | 1 | 0 | 2.00 |
Star Equity currently has a consensus target price of $28.00, indicating a potential upside of 188.51%. Kelly Services has a consensus target price of $20.00, indicating a potential upside of 19.12%. Given Star Equity’s stronger consensus rating and higher probable upside, equities analysts clearly believe Star Equity is more favorable than Kelly Services.
Profitability
This table compares Star Equity and Kelly Services’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Star Equity | -4.35% | -4.21% | -2.39% |
| Kelly Services | -6.73% | 2.69% | 1.19% |
Risk & Volatility
Star Equity has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500. Comparatively, Kelly Services has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500.
Valuation and Earnings
This table compares Star Equity and Kelly Services”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Star Equity | $172.16 million | 0.21 | -$5.92 million | ($3.06) | -3.17 |
| Kelly Services | $4.25 billion | 0.14 | -$254.10 million | ($7.81) | -2.15 |
Star Equity has higher earnings, but lower revenue than Kelly Services. Star Equity is trading at a lower price-to-earnings ratio than Kelly Services, indicating that it is currently the more affordable of the two stocks.
Summary
Star Equity beats Kelly Services on 8 of the 14 factors compared between the two stocks.
About Star Equity
Star Equity Holdings, Inc. engages in the construction business in the United States and internationally. It operates through two segments: Construction, and Investments. It manufactures modular housing units, structural wall panels, permanent wood foundation systems, and other engineered wood products; supplies general contractors with building materials; holds real estate assets; and manages investments. The company was formerly known as Digirad Corporation and changed its name to Star Equity Holdings, Inc. in December 2020. Star Equity Holdings, Inc. was founded in 1985 and is headquartered in Old Greenwich, Connecticut.
About Kelly Services
Kelly Services, Inc., together with its subsidiaries, provides workforce solutions to various industries. The company operates through five segments: Professional & Industrial; Science, Engineering & Technology; Education; Outsourcing & Consulting; and International. The Professional & Industrial segment delivers staffing, outcome-based, and permanent placement services providing administrative, accounting, and finance; light industrial; contact center staffing; and other workforce solutions. The Science, Engineering & Technology segment offers staffing, outcome-based, and permanent placement services in the areas of science and clinical research, engineering, technology, and telecommunications specialties. The Education segment provides staffing, permanent placement, and executive search services to pre-K-12 school districts and education organizations. The Outsourcing & Consulting segment offers managed service provider, recruitment process outsourcing, payroll process outsourcing, and executive coaching programs to customers on a global basis that includes its RocketPower brand. The International segment provides staffing, recruitment process outsourcing, and permanent placement services. The company serves customers in the United States, Canada, Mexico, Puerto Rico, France, Switzerland, Portugal, Russia, Italy, rest of Europe, and the Asia-Pacific region. Kelly Services, Inc. was founded in 1946 and is headquartered in Troy, Michigan.
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