Contrasting Insperity (NYSE:NSP) & Korn/Ferry International (NYSE:KFY)

Korn/Ferry International (NYSE:KFY) and Insperity (NYSE:NSP) are both business services companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, institutional ownership, earnings and risk.

Institutional & Insider Ownership

98.8% of Korn/Ferry International shares are held by institutional investors. Comparatively, 93.4% of Insperity shares are held by institutional investors. 1.0% of Korn/Ferry International shares are held by insiders. Comparatively, 5.3% of Insperity shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Korn/Ferry International pays an annual dividend of $1.92 per share and has a dividend yield of 2.7%. Insperity pays an annual dividend of $2.40 per share and has a dividend yield of 5.2%. Korn/Ferry International pays out 40.8% of its earnings in the form of a dividend. Insperity pays out 226.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Korn/Ferry International has increased its dividend for 5 consecutive years and Insperity has increased its dividend for 14 consecutive years. Insperity is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Korn/Ferry International and Insperity”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Korn/Ferry International	$2.76 billion	1.35	$246.06 million	$4.71	15.07
Insperity	$6.58 billion	0.26	$91.00 million	$1.06	43.65

Korn/Ferry International has higher earnings, but lower revenue than Insperity. Korn/Ferry International is trading at a lower price-to-earnings ratio than Insperity, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations for Korn/Ferry International and Insperity, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Korn/Ferry International	0	1	2	0	2.67
Insperity	2	2	1	0	1.80

Korn/Ferry International currently has a consensus price target of $81.00, suggesting a potential upside of 14.10%. Insperity has a consensus price target of $58.33, suggesting a potential upside of 26.09%. Given Insperity’s higher probable upside, analysts plainly believe Insperity is more favorable than Korn/Ferry International.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Korn/Ferry International	8.95%	14.55%	7.29%
Insperity	0.60%	35.32%	1.84%

Volatility & Risk

Korn/Ferry International has a beta of 1.47, meaning that its stock price is 47% more volatile than the S&P 500. Comparatively, Insperity has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500.

Summary

Korn/Ferry International beats Insperity on 10 of the 17 factors compared between the two stocks.

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.

About Insperity

Insperity, Inc. engages in the provision of human resources (HR) and business solutions to improve business performance for small and medium-sized businesses primarily in the United States. It offers its HR services through its workforce optimization and workforce synchronization solutions that include a range of human resources functions, such as payroll and employment administration, employee benefits, workers' compensation, government compliance, performance management, and training and development services. The company also provides Insperity Premier, a cloud-based human capital management platform that offers professional employer organization HR outsourcing solutions to its clients; people management services; and employer liability management services, as well as solutions for middle market. In addition, it offers MarketPlace, an e-commerce portal that offers a range of products and services; and Workforce Acceleration, a human capital management and payroll services solution; integrated payroll; benefits administration; HR administration and employee onboarding; time and attendance; performance management; reporting and analytics; recruiting; employment screening; retirement; and insurance services. The company was formerly known as Administaff, Inc. and changed its name to Insperity, Inc. in March 2011. Insperity, Inc. was founded in 1986 and is headquartered in Kingwood, Texas.