TrueBlue (NYSE: TBI) and Kforce (NASDAQ:KFRC) are both small-cap business services companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Institutional & Insider Ownership

92.7% of TrueBlue shares are held by institutional investors. Comparatively, 78.9% of Kforce shares are held by institutional investors. 2.0% of TrueBlue shares are held by insiders. Comparatively, 13.3% of Kforce 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.

Valuation & Earnings

This table compares TrueBlue and Kforce’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TrueBlue $2.61 billion 0.32 $138.93 million $1.41 14.08
Kforce $1.34 billion 0.34 $73.75 million $1.37 13.07

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

Risk and Volatility

TrueBlue has a beta of 2.34, suggesting that its share price is 134% more volatile than the S&P 500. Comparatively, Kforce has a beta of 1.54, suggesting that its share price is 54% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for TrueBlue and Kforce, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TrueBlue 0 3 0 0 2.00
Kforce 0 3 2 0 2.40

TrueBlue currently has a consensus target price of $18.67, indicating a potential downside of 5.96%. Kforce has a consensus target price of $24.67, indicating a potential upside of 37.80%. Given Kforce’s stronger consensus rating and higher probable upside, analysts clearly believe Kforce is more favorable than TrueBlue.

Dividends

Kforce pays an annual dividend of $0.48 per share and has a dividend yield of 2.7%. TrueBlue does not pay a dividend. Kforce pays out 35.0% of its earnings in the form of a dividend.

Profitability

This table compares TrueBlue and Kforce’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TrueBlue 2.27% 15.18% 7.29%
Kforce 2.64% 29.67% 10.02%

Summary

Kforce beats TrueBlue on 10 of the 16 factors compared between the two stocks.

TrueBlue Company Profile

TrueBlue, Inc. is a provider of specialized workforce solutions. The Company is engaged in providing staffing, on-site workforce management and recruitment process outsourcing services. The Company operates through three segments: PeopleReady, PeopleManagement and PeopleScout. Its PeopleReady segment provides blue-collar contingent staffing through the PeopleReady service line. Its PeopleManagement segment provides primarily on-premise contingent staffing and on-premise management of those contingent staffing services through four segments: Staff Management a SMX (Staff Management), SIMOS Insourcing Solutions Corporation (SIMOS), Centerline and PlaneTechs. Its PeopleScout segment provides permanent employee recruitment process outsourcing (RPO) and management of outsourced labor service providers through two segments: PeopleScout and PeopleScout MSP.

Kforce Company Profile

Kforce Inc. (Kforce) is engaged in providing professional and technical specialty staffing services and solutions. The Company operates through three segments, which include Technology (Tech), Finance and Accounting (FA) and Government Solutions (GS). The Company’s Tech segment includes the operations of its subsidiary Kforce Global Solutions, Inc. The FA segment is engaged in providing both temporary staffing and permanent placement services to its clients in areas, such as general accounting, business analysis and others. The GS segment is engaged in providing services and solutions to the Federal Government as both a prime contractor and a subcontractor in the fields of information technology, and finance and accounting. Kforce operates through field offices located throughout the United States and one office in Manila, the Philippines. The Company offers various staffing services that consist of temporary staffing services (Flex) and permanent placement services (Direct Hire).

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