Paychex (PAYX) and Kelly Services (KELYA) Head to Head Survey
Paychex (NASDAQ: PAYX) and Kelly Services (NASDAQ:KELYA) are both business services companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, profitabiliy, dividends, earnings and analyst recommendations.
Earnings and Valuation
This table compares Paychex and Kelly Services’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Paychex||$3.15 billion||6.40||$1.37 billion||N/A||N/A|
|Kelly Services||$5.22 billion||0.16||$91.70 million||$3.15||7.09|
Paychex has higher revenue, but lower earnings than Kelly Services.
This is a summary of current ratings and target prices for Paychex and Kelly Services, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Paychex currently has a consensus price target of $59.16, suggesting a potential upside of 5.47%. Given Paychex’s higher possible upside, equities analysts plainly believe Paychex is more favorable than Kelly Services.
This table compares Paychex and Kelly Services’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional & Insider Ownership
68.5% of Paychex shares are held by institutional investors. Comparatively, 65.9% of Kelly Services shares are held by institutional investors. 11.6% of Paychex shares are held by insiders. Comparatively, 16.1% of Kelly Services shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Paychex pays an annual dividend of $2.00 per share and has a dividend yield of 3.6%. Kelly Services pays an annual dividend of $0.30 per share and has a dividend yield of 1.3%. Kelly Services pays out 9.5% of its earnings in the form of a dividend. Paychex has raised its dividend for 6 consecutive years. Paychex is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility & Risk
Paychex has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Kelly Services has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500.
Paychex beats Kelly Services on 12 of the 16 factors compared between the two stocks.
Paychex, Inc. is a provider of integrated human capital management (HCM) solutions for payroll, human resource (HR), retirement and insurance services for small- to medium-sized businesses in the United States. The Company also has operations in Germany. The Company offers services, including Payroll processing, Human Resource Services, and Accounting and Financial Services. As of May 31, 2016, the Company serviced approximately 605,000 payroll clients. It offers a portfolio of HCM services and products that allows its clients to meet their payroll and HR needs. Its payroll-related ancillary services and human resource service (HRS) offerings often leverage the information gathered in the base payroll processing service, allowing it to provide outsourcing services covering the HCM spectrum. The Company, through its HCM software-as-a-service platform, Paychex Flex, provides an integrated product suite that covers the employee life cycle from recruiting and hiring to retirement.
About Kelly Services
Kelly Services, Inc. is a workforce solutions provider, which is engaged in offering a range of specialty services. The Company provides workforce solutions in three regions: the Americas; Europe, the Middle East and Africa (EMEA), and Asia Pacific (APAC). The Company’s segments are Americas Commercial, Americas Professional and Technical (Americas PT), EMEA Commercial, EMEA Professional and Technical (EMEA PT), and Outsourcing and Consulting Group (OCG). The Americas Commercial segment includes Office, Contact Center, Education, Marketing and Electronic Assembly. The Americas PT segment includes a range of specialty staffing services. The EMEA Commercial segment provides a range of staffing services, including Office, Contact Center and its temporary-to-hire service. The EMEA PT segment provides Engineering, Finance and Accounting services. The OCG segment delivers talent management solutions across multiple regions, skill sets and a spectrum of talent categories.
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