Reviewing Recruit (OTCMKTS:RCRUY) and LegalZoom.com (NASDAQ:LZ)

LegalZoom.com (NASDAQ:LZ) and Recruit (OTCMKTS:RCRUY) are both industrials companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, profitability, valuation and earnings.

Insider and Institutional Ownership

82.0% of LegalZoom.com shares are held by institutional investors. 7.4% of LegalZoom.com shares are held by company 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.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for LegalZoom.com and Recruit, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LegalZoom.com	3	5	0	0	1.62
Recruit	0	1	0	0	2.00

LegalZoom.com presently has a consensus price target of $7.30, suggesting a potential upside of 20.46%. Given LegalZoom.com’s higher probable upside, analysts clearly believe LegalZoom.com is more favorable than Recruit.

Profitability

This table compares LegalZoom.com and Recruit’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LegalZoom.com	2.13%	15.83%	5.08%
Recruit	14.94%	35.54%	20.88%

Risk & Volatility

LegalZoom.com has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500. Comparatively, Recruit has a beta of 1.74, indicating that its share price is 74% more volatile than the S&P 500.

Earnings & Valuation

This table compares LegalZoom.com and Recruit”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LegalZoom.com	$756.04 million	1.37	$15.43 million	$0.09	67.33
Recruit	$24.56 billion	6.59	$3.28 billion	$0.52	42.25

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

Summary

Recruit beats LegalZoom.com on 9 of the 13 factors compared between the two stocks.

About LegalZoom.com

LegalZoom.com, Inc., together with its subsidiaries, operates an online platform that supports the legal, compliance, and business management needs of small businesses and consumers in the United States. The company’s platform offers business formation products, such as limited liability company, incorporation of C and S corporations, nonprofit formations, doing-business-as, corporate changes and filings, business licenses, legal forms, and beneficial ownership information reports; intellectual property products consisting of trademark and patent applications, and copyright registrations; and tax services, including business and personal tax preparations. It also provides consumer, estate planning, and other services comprising last will and testament, living will, living trust, power of attorney, and name change. In addition, the company offers subscriptions services, including registered agent, compliance, attorney advice, tax advice and preparation, eSignature, virtual mail and check deposit services, trademark monitoring, and estate planning bundle. The company was incorporated in 1999 and is headquartered in Mountain View, California.

About Recruit

Recruit Holdings Co., Ltd. provides HR technology and business solutions that transforms the world of work. It operates through three segments: HR Technology, Matching & Solutions, and Staffing. The HR Technology segment provides various technological solutions that help job seekers and employers in navigating hiring and recruitment. The Matching & Solutions segment offers HR solutions that support business clients’ recruiting and hiring activities and individual users’ job search activities through its job advertising services and placement services. This segment also provides marketing solutions that provide matching platforms for businesses in various industries, including housing and real estate, beauty, bridal, travel, dining, and others, as well as SaaS solutions, which are business and management support tools for small and medium-sized companies. The Staffing segment provides temporary staffing services in Japan, Europe, the United States, and Australia. Recruit Holdings Co., Ltd. operates in more than 60 countries. The company was formerly known as Recruit Co., Ltd. and changed its name to Recruit Holdings Co., Ltd. in October 2012. Recruit Holdings Co., Ltd. was founded in 1960 and is headquartered in Tokyo, Japan.