Critical Contrast: Intellinetics (OTCMKTS:INLXD) & Kelly Services (NASDAQ:KELYA)

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kelly Services	$4.06 billion	0.15	-$254.10 million	($7.81)	-2.19
Intellinetics	$2.54 million	0.84	-$2.13 million	($6.00)	-0.92

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

Volatility & Risk

Kelly Services has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, Intellinetics has a beta of 0.22, suggesting that its share price is 78% less volatile than the S&P 500.

Profitability

This table compares Kelly Services and Intellinetics’ 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%
Intellinetics	-84.11%	N/A	-214.86%

Institutional & Insider Ownership

76.3% of Kelly Services shares are owned by institutional investors. 5.4% of Kelly Services shares are owned by insiders. Comparatively, 27.7% of Intellinetics shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations for Kelly Services and Intellinetics, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kelly Services	1	1	2	0	2.25
Intellinetics	0	0	0	0	0.00

Kelly Services currently has a consensus target price of $20.00, suggesting a potential upside of 17.10%. Given Kelly Services’ stronger consensus rating and higher possible upside, research analysts clearly believe Kelly Services is more favorable than Intellinetics.

Summary

Kelly Services beats Intellinetics on 9 of the 14 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 Intellinetics

Intellinetics, Inc. develops, markets, and sells document solutions software to the public and private sectors in the United States. The company's software platform allows its customers to capture and manage documents across operations, such as scanned hard-copy documents and digital documents, including Microsoft Office 365, digital images, audios, videos, and emails. It offers IntelliCloud software platform solutions that include image processing modules, records management, workflow, and extended components. The company also provides installation, integration, training, and consulting services, as well as ongoing software maintenance and customer support services; and pre-installation assessment, project scoping, and implementation consulting services. It sells its products to resellers and directly to customers, as well as provides access to its software solutions as a service through the Internet. The company was formerly known as GlobalWise Investments, Inc. and changed its name to Intellinetics, Inc. in September 2014. Intellinetics, Inc. was founded in 1996 and is headquartered in Columbus, Ohio.