Analyzing Resources Connection (RECN) & Korn/Ferry International (KFY)
Resources Connection (NASDAQ: RECN) and Korn/Ferry International (NYSE:KFY) are both small-cap business services companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitabiliy, valuation, risk and earnings.
This is a summary of current recommendations for Resources Connection and Korn/Ferry International, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Resources Connection presently has a consensus price target of $12.00, indicating a potential downside of 10.45%. Korn/Ferry International has a consensus price target of $30.25, indicating a potential downside of 8.19%. Given Korn/Ferry International’s stronger consensus rating and higher possible upside, analysts clearly believe Korn/Ferry International is more favorable than Resources Connection.
Institutional & Insider Ownership
85.0% of Resources Connection shares are held by institutional investors. Comparatively, 90.9% of Korn/Ferry International shares are held by institutional investors. 8.6% of Resources Connection shares are held by insiders. Comparatively, 1.2% of Korn/Ferry International shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Risk & Volatility
Resources Connection has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500. Comparatively, Korn/Ferry International has a beta of 1.41, suggesting that its stock price is 41% more volatile than the S&P 500.
Resources Connection pays an annual dividend of $0.44 per share and has a dividend yield of 3.3%. Korn/Ferry International pays an annual dividend of $0.40 per share and has a dividend yield of 1.2%. Resources Connection pays out 69.8% of its earnings in the form of a dividend. Korn/Ferry International pays out 36.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
This table compares Resources Connection and Korn/Ferry International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings and Valuation
This table compares Resources Connection and Korn/Ferry International’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Resources Connection||$587.31 million||0.68||$46.28 million||$0.63||21.27|
|Korn/Ferry International||$1.56 billion||1.21||$196.72 million||$1.10||29.95|
Korn/Ferry International has higher revenue and earnings than Resources Connection. Resources Connection is trading at a lower price-to-earnings ratio than Korn/Ferry International, indicating that it is currently the more affordable of the two stocks.
Korn/Ferry International beats Resources Connection on 12 of the 15 factors compared between the two stocks.
About Resources Connection
Resources Connection, Inc. is a multinational consulting firm. The Company’s operating entities primarily provide services under the name Resources Global Professionals (RGP). The Company provides consulting and business initiative support services to its global client base in the areas of accounting; finance; corporate governance, risk and compliance (GRC) management; corporate advisory, strategic communications and restructuring; information management; human capital; supply chain management, and legal and regulatory. The Company provides its services and solutions to a client base in a range of industries. Its finance and accounting services encompass accounting operations, financial reporting, internal controls, financial analyses and business transactions. It offers a range of technology solutions, which include enterprise resource planning systems; strategic front-of-the-house systems; human resources (HR) information systems, and supply chain management systems, among others.
About Korn/Ferry International
Korn/Ferry International (Korn Ferry) is a people and organizational advisory company. The Company and its subsidiaries are engaged in the provision of talent management solutions, including executive search on a retained basis, recruitment for non-executive professionals, recruitment process outsourcing, and leadership and talent consulting services. Its segments include Executive Search, Hay Group and Futurestep. The Executive Search segment focuses on recruiting Board of Director and C-level positions, in addition to research-based interviewing and onboarding solutions, for clients predominantly in the consumer, financial services, industrial, life sciences/healthcare and technology industries. The Hay Group segment assists clients with ongoing assessment, compensation and development of their senior executives and management teams. The Futurestep segment provides talent acquisition solutions and services, such as project recruitment, individual professional search and consulting.
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