Kelly Services (NASDAQ:KELYB – Get Free Report) and LegalZoom.com (NASDAQ:LZ – Get Free Report) are both small-cap industrials companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, valuation, earnings, profitability and analyst recommendations.
Analyst Recommendations
This is a summary of recent ratings and target prices for Kelly Services and LegalZoom.com, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Kelly Services | 1 | 0 | 0 | 0 | 1.00 |
| LegalZoom.com | 3 | 5 | 0 | 0 | 1.62 |
LegalZoom.com has a consensus target price of $7.30, suggesting a potential upside of 28.79%. Given LegalZoom.com’s stronger consensus rating and higher possible upside, analysts clearly believe LegalZoom.com is more favorable than Kelly Services.
Volatility & Risk
Dividends
Kelly Services pays an annual dividend of $0.30 per share and has a dividend yield of 1.3%. LegalZoom.com pays an annual dividend of $1.44 per share and has a dividend yield of 25.4%. Kelly Services pays out -3.8% of its earnings in the form of a dividend. LegalZoom.com pays out 1,600.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Insider and Institutional Ownership
0.2% of Kelly Services shares are held by institutional investors. Comparatively, 82.0% of LegalZoom.com shares are held by institutional investors. 93.1% of Kelly Services shares are held by insiders. Comparatively, 7.4% of LegalZoom.com shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Earnings and Valuation
This table compares Kelly Services and LegalZoom.com”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Kelly Services | $4.06 billion | 0.19 | -$254.10 million | ($7.81) | -2.86 |
| LegalZoom.com | $792.49 million | 1.22 | $15.43 million | $0.09 | 62.98 |
LegalZoom.com has lower revenue, but higher earnings than Kelly Services. Kelly Services is trading at a lower price-to-earnings ratio than LegalZoom.com, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Kelly Services and LegalZoom.com’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Kelly Services | -6.73% | 2.69% | 1.19% |
| LegalZoom.com | 2.13% | 15.83% | 5.08% |
Summary
LegalZoom.com beats Kelly Services on 12 of the 15 factors compared between the two stocks.
About Kelly Services
Kelly Services, Inc. engages in staffing and workforce solutions. It operates through the following segments: Americas Staffing, Global Talent Solutions, and International Staffing. The Americas Staffing segment delivers temporary staffing, as well as direct-hire placement services, in a number of specialty staffing services, including office, education, marketing, electronic assembly, light industrial, science, engineering, and information technology in United States, Puerto Rico, Canada, Mexico and Brazil. The Global Talent Solutions segment offers outsourcing, consulting, and centrally delivered staffing business. The International Staffing segment relates to branch-delivered staffing business in the Europe, Middle East, and Africa region, as well as in the Asia Pacific. The company was founded by William Russell Kelly on October 7, 1946 and is headquartered in Troy, MI.
About LegalZoom.com
LegalZoom.com, Inc., together with its subsidiaries, operates an online platform that supports the legal, compliance, and business management needs of small businesses and consumers in the United States. The company’s platform offers business formation products, such as limited liability company, incorporation of C and S corporations, nonprofit formations, doing-business-as, corporate changes and filings, business licenses, legal forms, and beneficial ownership information reports; intellectual property products consisting of trademark and patent applications, and copyright registrations; and tax services, including business and personal tax preparations. It also provides consumer, estate planning, and other services comprising last will and testament, living will, living trust, power of attorney, and name change. In addition, the company offers subscriptions services, including registered agent, compliance, attorney advice, tax advice and preparation, eSignature, virtual mail and check deposit services, trademark monitoring, and estate planning bundle. The company was incorporated in 1999 and is headquartered in Mountain View, California.
Receive News & Ratings for Kelly Services Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Kelly Services and related companies with MarketBeat.com's FREE daily email newsletter.
