Analyzing Korn/Ferry International (NYSE:KFY) and Thomson Reuters (NASDAQ:TRI)

Thomson Reuters (NASDAQ:TRI) and Korn/Ferry International (NYSE:KFY) are both industrials companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, profitability, earnings, dividends, valuation, risk and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and price targets for Thomson Reuters and Korn/Ferry International, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Thomson Reuters	1	5	10	1	2.65
Korn/Ferry International	0	1	4	0	2.80

Thomson Reuters presently has a consensus target price of $142.83, suggesting a potential upside of 40.26%. Korn/Ferry International has a consensus target price of $78.50, suggesting a potential downside of 6.68%. Given Thomson Reuters’ higher possible upside, equities research analysts clearly believe Thomson Reuters is more favorable than Korn/Ferry International.

Valuation & Earnings

This table compares Thomson Reuters and Korn/Ferry International”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Thomson Reuters	$7.83 billion	5.66	$1.50 billion	$3.76	27.08
Korn/Ferry International	$2.94 billion	1.46	$277.43 million	$5.24	16.05

Thomson Reuters has higher revenue and earnings than Korn/Ferry International. Korn/Ferry International is trading at a lower price-to-earnings ratio than Thomson Reuters, indicating that it is currently the more affordable of the two stocks.

Dividends

Thomson Reuters pays an annual dividend of $2.62 per share and has a dividend yield of 2.6%. Korn/Ferry International pays an annual dividend of $2.20 per share and has a dividend yield of 2.6%. Thomson Reuters pays out 69.7% of its earnings in the form of a dividend. Korn/Ferry International pays out 42.0% 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 raised its dividend for 5 consecutive years. Korn/Ferry International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Thomson Reuters has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500. Comparatively, Korn/Ferry International has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500.

Insider & Institutional Ownership

17.3% of Thomson Reuters shares are held by institutional investors. Comparatively, 98.8% of Korn/Ferry International shares are held by institutional investors. 1.0% of Korn/Ferry International shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Thomson Reuters	21.22%	15.82%	10.27%
Korn/Ferry International	9.44%	14.34%	7.31%

Summary

Thomson Reuters beats Korn/Ferry International on 10 of the 18 factors compared between the two stocks.

About Thomson Reuters

Thomson Reuters Corporation provides business information services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates in five segments: Legal Professionals, Corporates, Tax & Accounting Professionals, Reuters News, and Global Print. The Legal Professionals segment offers research and workflow products focusing on legal research and integrated legal workflow solutions that combine content, tools, and analytics to law firms and governments. The Corporates segment provides a suite of content-enabled technology solutions for legal, tax, regulatory, compliance, and IT professionals. The Tax & Accounting Professionals segment offers research and workflow products focusing on tax offerings and automating tax workflows to tax, accounting, and audit professionals in accounting firms. The Reuters News segment provides business, financial, and international news to media organizations, professional, and news consumers through news agency and industry events. The Global Print segment offers legal and tax information primarily in print format to legal and tax professionals, governments, law schools, and corporations. The company was formerly known as The Thomson Corporation and changed its name to Thomson Reuters Corporation in April 2008. The company was founded in 1851 and is headquartered in Toronto, Canada. Thomson Reuters Corporation is a subsidiary of The Woodbridge Company Limited.

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.