Comparing Gartner (NYSE:IT) and Kelly Services (NASDAQ:KELYA)

Kelly Services (NASDAQ:KELYA) and Gartner (NYSE:IT) are both industrials companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, dividends, valuation and earnings.

Analyst Recommendations

This is a breakdown of recent recommendations for Kelly Services and Gartner, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kelly Services	1	1	1	0	2.00
Gartner	2	7	1	0	1.90

Kelly Services presently has a consensus target price of $20.00, suggesting a potential upside of 20.55%. Gartner has a consensus target price of $198.50, suggesting a potential downside of 13.00%. Given Kelly Services’ stronger consensus rating and higher possible upside, equities analysts plainly believe Kelly Services is more favorable than Gartner.

Risk and Volatility

Kelly Services has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, Gartner has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500.

Profitability

This table compares Kelly Services and Gartner’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%
Gartner	11.99%	525.46%	13.45%

Valuation & Earnings

This table compares Kelly Services and Gartner”s top-line revenue, earnings per share 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)	-2.12
Gartner	$6.50 billion	2.22	$729.23 million	$11.15	20.46

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

Institutional & Insider Ownership

76.3% of Kelly Services shares are held by institutional investors. Comparatively, 91.5% of Gartner shares are held by institutional investors. 5.4% of Kelly Services shares are held by insiders. Comparatively, 2.6% of Gartner shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Gartner beats Kelly Services on 10 of the 13 factors compared between the two stocks.

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 Gartner

Gartner, Inc. operates as a research and advisory company in the United States, Canada, Europe, the Middle East, Africa, and internationally. It operates through three segments: Research, Conferences, and Consulting. The Research segment delivers its research primarily through a subscription service that include on-demand access to published research content, data and benchmarks, and direct access to a network of research experts. The Conferences segment offers executives and teams in an organization the opportunity to learn, share, and network. The Consulting segment offers market-leading research, custom analysis, and on-the-ground support services. This segment also offers actionable solutions for IT-related priorities, including IT cost optimization, digital transformation, and IT sourcing optimization. Gartner, Inc. was founded in 1979 and is headquartered in Stamford, Connecticut.