Head-To-Head Contrast: Automatic Data Processing (ADP) vs. Its Rivals

Automatic Data Processing (NASDAQ: ADP) is one of 186 public companies in the “IT Services & Consulting” industry, but how does it weigh in compared to its competitors? We will compare Automatic Data Processing to related companies based on the strength of its valuation, institutional ownership, analyst recommendations, earnings, dividends, risk and profitability.

Insider & Institutional Ownership

78.6% of Automatic Data Processing shares are held by institutional investors. Comparatively, 63.0% of shares of all “IT Services & Consulting” companies are held by institutional investors. 0.3% of Automatic Data Processing shares are held by company insiders. Comparatively, 16.5% of shares of all “IT Services & Consulting” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Automatic Data Processing and its competitors gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Automatic Data Processing $12.38 billion $1.73 billion 29.14
Automatic Data Processing Competitors $2.79 billion $289.83 million 334.39

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

Profitability

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

Net Margins Return on Equity Return on Assets
Automatic Data Processing 13.04% 40.61% 4.42%
Automatic Data Processing Competitors -20.29% -270.89% -4.58%

Dividends

Automatic Data Processing pays an annual dividend of $2.28 per share and has a dividend yield of 2.0%. Automatic Data Processing pays out 57.9% of its earnings in the form of a dividend. As a group, “IT Services & Consulting” companies pay a dividend yield of 1.6% and pay out 37.4% of their earnings in the form of a dividend.

Risk & Volatility

Automatic Data Processing has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500. Comparatively, Automatic Data Processing’s competitors have a beta of 1.11, indicating that their average stock price is 11% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Automatic Data Processing and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Automatic Data Processing 0 12 3 0 2.20
Automatic Data Processing Competitors 732 4669 7443 164 2.54

Automatic Data Processing currently has a consensus price target of $111.15, indicating a potential downside of 3.18%. As a group, “IT Services & Consulting” companies have a potential upside of 3.29%. Given Automatic Data Processing’s competitors stronger consensus rating and higher probable upside, analysts clearly believe Automatic Data Processing has less favorable growth aspects than its competitors.

Summary

Automatic Data Processing competitors beat Automatic Data Processing on 8 of the 15 factors compared.

Automatic Data Processing Company Profile

Automatic Data Processing, Inc. (ADP) is a provider of human capital management (HCM) solutions to employers, offering solutions to businesses of various sizes. The Company also provides business process outsourcing solutions. Its segments include Employer Services and Professional Employer Organization (PEO) Services. The Employer Services segment offers a range of human resources (HR) business process outsourcing and technology-enabled HCM solutions. These offerings include payroll services, benefits administration, talent management, HR management, time and attendance management, insurance services, retirement services, and tax and compliance services. ADP TotalSource, ADP’s PEO business, offers small and mid-sized businesses a HR outsourcing solution through a co-employment model. As a PEO, ADP TotalSource provides HR management services while the client continues to direct the day-to-day job-related duties of the employees.

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