Korn/Ferry International (NYSE:KFY) & Resources Connection (NASDAQ:RGP) Head to Head Comparison

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

Analyst Recommendations

This is a breakdown of current recommendations for Korn/Ferry International and Resources Connection, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Korn/Ferry International	0	1	3	0	2.75
Resources Connection	2	0	2	0	2.00

Korn/Ferry International currently has a consensus target price of $78.67, indicating a potential upside of 17.34%. Resources Connection has a consensus target price of $6.00, indicating a potential upside of 14.07%. Given Korn/Ferry International’s stronger consensus rating and higher possible upside, research analysts plainly believe Korn/Ferry International is more favorable than Resources Connection.

Dividends

Korn/Ferry International pays an annual dividend of $1.92 per share and has a dividend yield of 2.9%. Resources Connection pays an annual dividend of $0.28 per share and has a dividend yield of 5.3%. Korn/Ferry International pays out 38.9% of its earnings in the form of a dividend. Resources Connection pays out -4.9% 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. Korn/Ferry International has increased its dividend for 5 consecutive years. Resources Connection is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Korn/Ferry International	9.21%	14.53%	7.35%
Resources Connection	-35.25%	2.11%	1.54%

Insider & Institutional Ownership

98.8% of Korn/Ferry International shares are owned by institutional investors. Comparatively, 93.2% of Resources Connection shares are owned by institutional investors. 1.0% of Korn/Ferry International shares are owned by company insiders. Comparatively, 7.9% of Resources Connection shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Korn/Ferry International has a beta of 1.34, meaning that its share price is 34% more volatile than the S&P 500. Comparatively, Resources Connection has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500.

Earnings and Valuation

This table compares Korn/Ferry International and Resources Connection”s gross 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	1.27	$246.06 million	$4.93	13.60
Resources Connection	$551.33 million	0.32	-$191.78 million	($5.72)	-0.92

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.

Summary

Korn/Ferry International beats Resources Connection on 14 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 Resources Connection

Resources Connection, Inc. provides consulting services to business customers under the Resources Global Professionals name in North America, Europe, and the Asia Pacific. The company offers services in the areas of transactions, including integration and divestitures, bankruptcy/restructuring, going public readiness and support, financial process optimization, and system implementation; and regulations, such as accounting regulations, internal audit and compliance, data privacy and security, healthcare compliance, and regulatory compliance. It provides transformations services comprising finance transformation, digital transformation, supply chain management, cloud migration, and data design and analytics. The company was formerly known as RC Transaction Corp. and changed its name to Resources Connection, Inc. in August 2000. Resources Connection, Inc. was founded in 1996 and is headquartered in Irvine, California.