Critical Analysis: Korn/Ferry International (KFY) vs. Its Rivals

Korn/Ferry International (NYSE:KFY) is one of 19 publicly-traded companies in the “Staffing” industry, but how does it contrast to its peers? We will compare Korn/Ferry International to similar companies based on the strength of its risk, analyst recommendations, institutional ownership, profitability, earnings, dividends and valuation.

Insider and Institutional Ownership

98.8% of Korn/Ferry International shares are held by institutional investors. Comparatively, 64.8% of shares of all “Staffing” companies are held by institutional investors. 1.4% of Korn/Ferry International shares are held by company insiders. Comparatively, 16.1% of shares of all “Staffing” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Korn/Ferry International and its peers revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Korn/Ferry International	$2.76 billion	$246.06 million	15.61
Korn/Ferry International Competitors	$4.43 billion	$37.26 million	7.55

Korn/Ferry International’s peers have higher revenue, but lower earnings than Korn/Ferry International. Korn/Ferry International is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Volatility and Risk

Korn/Ferry International has a beta of 1.42, suggesting that its stock price is 42% more volatile than the S&P 500. Comparatively, Korn/Ferry International’s peers have a beta of 0.84, suggesting that their average stock price is 16% less volatile than the S&P 500.

Dividends

Korn/Ferry International pays an annual dividend of $1.92 per share and has a dividend yield of 2.7%. Korn/Ferry International pays out 41.6% of its earnings in the form of a dividend. As a group, “Staffing” companies pay a dividend yield of 3.3% and pay out 138.9% of their earnings in the form of a dividend. Korn/Ferry International has increased its dividend for 5 consecutive years.

Profitability

This table compares Korn/Ferry International and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Korn/Ferry International	8.91%	14.49%	7.21%
Korn/Ferry International Competitors	-98.39%	-16.17%	-8.84%

Analyst Ratings

This is a summary of recent ratings and target prices for Korn/Ferry International and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Korn/Ferry International	0	1	1	0	2.50
Korn/Ferry International Competitors	92	604	743	46	2.50

Korn/Ferry International presently has a consensus target price of $81.00, indicating a potential upside of 12.34%. As a group, “Staffing” companies have a potential upside of 30.44%. Given Korn/Ferry International’s peers stronger consensus rating and higher probable upside, analysts clearly believe Korn/Ferry International has less favorable growth aspects than its peers.

Summary

Korn/Ferry International beats its peers on 8 of the 15 factors compared.

About Korn/Ferry International

Korn Ferry, together with its subsidiaries, provides organizational consulting services worldwide. It operates through four segments: Consulting, Digital, Executive Search, and Recruitment Process Outsourcing (RPO) & Professional Search. The company provides executive search services to recruit board level, chief executive, other senior executive, and general management talent of organizations. It also offers organizational strategy, assessment and succession, leadership and professional development, and total reward services. In addition, the company provides RPO, business project, professional search, and outsource recruiting solutions. Further, the company offers tech-enabled solutions that identify structures, roles, capabilities, and behaviors to drive businesses. It serves public and private companies, and middle market and emerging growth companies, as well as government and non-profit organizations. The company was formerly known as Korn/Ferry International and changed its name to Korn Ferry in January 2019. Korn Ferry was founded in 1969 and is based in Los Angeles, California.