Automatic Data Processing (ADP) vs. Its Peers Financial Contrast

Automatic Data Processing (NASDAQ:ADP – Get Free Report) is one of 203 public companies in the “Professional Services” industry, but how does it contrast to its rivals? We will compare Automatic Data Processing to similar businesses based on the strength of its profitability, risk, valuation, analyst recommendations, dividends, earnings and institutional ownership.

Institutional & Insider Ownership

80.0% of Automatic Data Processing shares are held by institutional investors. Comparatively, 57.4% of shares of all “Professional Services” companies are held by institutional investors. 0.2% of Automatic Data Processing shares are held by company insiders. Comparatively, 17.1% of shares of all “Professional Services” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Automatic Data Processing and its rivals gross revenue, earnings per share and valuation.

Automatic Data Processing has higher revenue and earnings than its rivals. Automatic Data Processing is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Automatic Data Processing and its rivals’ net margins, return on equity and return on assets.

Dividends

Automatic Data Processing pays an annual dividend of $6.80 per share and has a dividend yield of 2.2%. Automatic Data Processing pays out 60.3% of its earnings in the form of a dividend. As a group, “Professional Services” companies pay a dividend yield of 2.4% and pay out -159.5% of their earnings in the form of a dividend. Automatic Data Processing has increased its dividend for 49 consecutive years. Automatic Data Processing lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Risk & Volatility

Automatic Data Processing has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500. Comparatively, Automatic Data Processing’s rivals have a beta of 0.96, indicating that their average stock price is 4% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Automatic Data Processing and its rivals, as reported by MarketBeat.

Automatic Data Processing presently has a consensus price target of $285.00, indicating a potential downside of 6.05%. As a group, “Professional Services” companies have a potential upside of 28.12%. Given Automatic Data Processing’s rivals stronger consensus rating and higher possible upside, analysts clearly believe Automatic Data Processing has less favorable growth aspects than its rivals.

Summary

Automatic Data Processing rivals beat Automatic Data Processing on 9 of the 15 factors compared.

Automatic Data Processing Company Profile

(Get Free Report)

Automatic Data Processing, Inc. provides cloud-based human capital management solutions worldwide. It operates in two segments, Employer Services and Professional Employer Organization (PEO). The Employer Services segment offers strategic, cloud-based platforms, and human resources (HR) outsourcing solutions. Its offerings include payroll services, benefits administration, talent management, HR management, workforce management, insurance, retirement, and compliance services, as well as integrated HCM solutions. The PEO Services segment provides HR outsourcing solution to businesses through a co-employment model. This segment offers employee benefits, protection and compliance, talent engagement, expertise, comprehensive outsourcing, and recruitment process outsourcing services. Automatic Data Processing, Inc. was founded in 1949 and is headquartered in Roseland, New Jersey.