Analyzing Forrester Research (NASDAQ:FORR) and Kelly Services (NASDAQ:KELYA)

Kelly Services (NASDAQ:KELYA) and Forrester Research (NASDAQ:FORR) are both small-cap industrials companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, valuation, analyst recommendations, risk, institutional ownership and dividends.

Earnings & Valuation

This table compares Kelly Services and Forrester Research”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kelly Services	$4.25 billion	0.14	-$254.10 million	($7.81)	-2.16
Forrester Research	$396.89 million	0.61	-$119.36 million	($2.25)	-5.62

Forrester Research has lower revenue, but higher earnings than Kelly Services. Forrester Research is trading at a lower price-to-earnings ratio than Kelly Services, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

76.3% of Kelly Services shares are owned by institutional investors. Comparatively, 55.2% of Forrester Research shares are owned by institutional investors. 5.4% of Kelly Services shares are owned by insiders. Comparatively, 40.7% of Forrester Research shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings for Kelly Services and Forrester Research, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kelly Services	1	1	2	0	2.25
Forrester Research	1	1	0	0	1.50

Kelly Services currently has a consensus price target of $20.00, suggesting a potential upside of 18.62%. Given Kelly Services’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Kelly Services is more favorable than Forrester Research.

Profitability

This table compares Kelly Services and Forrester Research’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%
Forrester Research	-11.17%	6.19%	1.93%

Volatility and Risk

Kelly Services has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500. Comparatively, Forrester Research has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500.

About Kelly Services

Kelly Services, Inc., together with its subsidiaries, provides workforce solutions to various industries. The company operates through five segments: Professional & Industrial; Science, Engineering & Technology; Education; Outsourcing & Consulting; and International. The Professional & Industrial segment delivers staffing, outcome-based, and permanent placement services providing administrative, accounting, and finance; light industrial; contact center staffing; and other workforce solutions. The Science, Engineering & Technology segment offers staffing, outcome-based, and permanent placement services in the areas of science and clinical research, engineering, technology, and telecommunications specialties. The Education segment provides staffing, permanent placement, and executive search services to pre-K-12 school districts and education organizations. The Outsourcing & Consulting segment offers managed service provider, recruitment process outsourcing, payroll process outsourcing, and executive coaching programs to customers on a global basis that includes its RocketPower brand. The International segment provides staffing, recruitment process outsourcing, and permanent placement services. The company serves customers in the United States, Canada, Mexico, Puerto Rico, France, Switzerland, Portugal, Russia, Italy, rest of Europe, and the Asia-Pacific region. Kelly Services, Inc. was founded in 1946 and is headquartered in Troy, Michigan.

About Forrester Research

Forrester Research, Inc. operates as an independent research and advisory company in the United States and internationally. The company operates in three segments: Research, Consulting, and Events. The Research segment primary subscription research services include Forrester Decisions, Forrester Research, and SiriusDecisions Research, which are designed to provide business and technology leaders with a proven path to growth through customer obsession. This segment delivers content, such as future trends, predictions, and market forecasts; deep consumer and business buyer data and insights; curated best practice models and tools to run business functions; operational and performance benchmarking data; and technology and service market landscapes and vendor evaluations. The Consulting segment provides consulting projects, include conducting maturity assessments, prioritizing best practices, developing strategies, building business cases, selecting technology vendors, structuring organizations, developing content marketing strategies and collateral, and sales tools; and advisory services. The Events segment hosts events related to business-to-business marketing, sales and product leadership, customer experience, security and risk, new technology and innovation, and data strategies and insights. The company sells its products and services through direct sales force in various locations. Forrester Research, Inc. was incorporated in 1983 and is headquartered in Cambridge, Massachusetts.