Kforce: A Quiet Performer In A Strong Industry

| About: Kforce, Inc. (KFRC)
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Summary

Jobs growth in the United States is setting records.

Kforce provides staffing solutions for all of these new job seekers.

Kforce has strong fundamentals and provides for a dividend for long term holders.

The United States is currently seeing one of the greatest streaks of consecutive months of job growth in history. When the Bureau of Labor Statistics released its jobs report saying that the economy had added 142,000 jobs in November it made for the 57th straight month of growth. Obviously all industries are benefiting, but perhaps none is more giddy about these results than the staffing and outsourcing industry.

The primary role of this industry of course is to help people find the jobs that they are qualified for. Businesses in this industry are particularly thrilled that so many people are looking for and finding work. It means that business has picked up for them as job seekers come knocking at the door.

Zack's Equity Research has seen such growth and improvement in the industry that it now ranks staffing and outsourcing in the top ten percent of its industry rankings. One of the companies involved in the industry is Kforce Inc. (NASDAQ:KFRC).

Kforce Is The Quiet Performer That Is Undervalued

Have you never heard of Kforce before? That's okay, the Tampa based company tends to fly under the radar. This may be because they focus on the staffing of senior level staff for the information technology, healthcare, and government sectors. What they lack in flash though they more than make up for in financial results.

Kforce saw a steady growth in earnings per share each year from 2009 through 2012. There was a stabilization in 2013 and then projections have the company growing once again this year. Even better than that, Kforce has projected earnings growth of in excess of 20% for the next five years.

Despite these encouraging statistics, Kforce is only valued at 17 times their projected earnings for 2015 as of this writing. This price to earnings ratio is not overly pessimistic, but it also does not seem to be giving Kforce enough credit.

A Hike In The Dividend Rewards Long Term Holders

When looking for companies to invest in, those that reward long term investors are typically attractive. A dividend paying stock brings about the kind of reward that so many investors are looking for.

Not only does Kforce offer a dividend with a yield at nearly two percent (as of this writing), but they just recently hiked that dividend by 10%. More dividend hikes in the future (if they are to come) would bring even more value to the long term holders who get into this stock now.

The dividend can provide a buffer in the event that things take a turn south for the stock. Even better, the dividend can help enhance returns if the stock climbs higher. It is a promising sign of the latter that Kforce is hiking their dividend.

Beating On Revenues And Earnings

For fundamental investors, one of the most exciting aspects of Kforce is the fact that the company has been beating expectations on both revenues and earnings. In its most recent quarter, Kforce reported earnings of $0.30 per share compared to a $0.28 per share forecast. Revenues were $313.8 million compared to an estimate of $311.8 million. These are all hopeful signs for any company, and they are not a one time hit for Kforce. Rather, the company has been posting surprises like this for a good while now.

Those who want to own stocks in some of the strongest industries should consider Kforce. The company may not provide for a lot of flashy chatter, but they get the job done and provide value to shareholders. During this time of massive jobs growth, it makes sense to add a staffing solutions company to the portfolio. Kforce can be that company.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.