Financial Analysis: Kforce (KFRC) vs. DLH (DLHC)
Kforce (NASDAQ: KFRC) and DLH (NASDAQ:DLHC) are both small-cap business services companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, analyst recommendations, profitability, risk and earnings.
Insider & Institutional Ownership
79.6% of Kforce shares are held by institutional investors. Comparatively, 55.5% of DLH shares are held by institutional investors. 12.5% of Kforce shares are held by insiders. Comparatively, 25.9% of DLH shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Kforce pays an annual dividend of $0.48 per share and has a dividend yield of 1.7%. DLH does not pay a dividend. Kforce pays out 30.6% of its earnings in the form of a dividend.
Risk and Volatility
Kforce has a beta of 1.53, suggesting that its share price is 53% more volatile than the S&P 500. Comparatively, DLH has a beta of 0.41, suggesting that its share price is 59% less volatile than the S&P 500.
This is a breakdown of current recommendations and price targets for Kforce and DLH, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Kforce currently has a consensus price target of $26.25, suggesting a potential downside of 7.89%. DLH has a consensus price target of $7.00, suggesting a potential upside of 12.72%. Given DLH’s stronger consensus rating and higher possible upside, analysts plainly believe DLH is more favorable than Kforce.
This table compares Kforce and DLH’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings and Valuation
This table compares Kforce and DLH’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Kforce||$1.36 billion||0.55||$33.28 million||$1.57||18.15|
|DLH||$115.66 million||0.64||$3.28 million||$0.27||23.00|
Kforce has higher revenue and earnings than DLH. Kforce is trading at a lower price-to-earnings ratio than DLH, indicating that it is currently the more affordable of the two stocks.
Kforce beats DLH on 9 of the 15 factors compared between the two stocks.
Kforce Inc. provides professional staffing services and solutions in the United States and internationally. It operates through Technology (Tech), Finance and Accounting (FA), and Government Solutions (GS) segments. The Tech segment provides temporary staffing and permanent placement services to its clients primarily in the areas of information technology, such as systems/applications architecture and development, project management, enterprise data management, business intelligence, artificial intelligence, machine learning, network architecture, and security. This segment serves clients in various industries comprising financial services, communications, insurance services, and government sectors. The FA segment offers temporary staffing and permanent placement services to its clients in areas, such as general accounting, business analysis, accounts payable, accounts receivable, financial analysis and reporting, taxation, budget preparation and analysis, mortgage and loan processing, cost analysis, professional administration, outsourced functional support, credit and collections, audit services, and systems and controls analysis and documentation. This segment serves clients in various industries, including financial services, healthcare, and government sectors. The GS segment provides staffing services and solutions to the Federal Government as a prime and a subcontractor. It offers integrated business solutions to its clients in areas, such as information technology infrastructure transformation, healthcare informatics, data and knowledge management and analytics, research and development, audit readiness, financial management, and accounting. Kforce Inc. was founded in 1962 and is headquartered in Tampa, Florida.
DLH Holdings Corp. provides healthcare and social services in the United States. It offers defense and veterans' health solutions, including case management, physical and behavioral health examinations, and medical administration and logistics services. The company also provides a range of human services and solutions, which consists of educational and environmental support services for the underserved children and youth comprising health, nutritional, parental, and behavioral services; and IT system architecture design, migration plan, and ongoing maintenance services. In addition, it offers public health and life sciences services, such as disease prevention; and health promotion to underserved and hard to reach at-risk communities through development of strategic communication campaigns, research on emerging trends, health informatics analyses, and application of best practices. The company offers its services to government agencies and other government clients. The company was formerly known as TeamStaff, Inc. and changed its name to DLH Holdings Corp. in June 2012. DLH Holdings Corp. was founded in 1969 and is headquartered in Atlanta, Georgia.
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