Critical Review: Adecco Group (AHEXY) versus Its Competitors

Adecco Group (OTCMKTS: AHEXY) is one of 23 public companies in the “Help supply services” industry, but how does it contrast to its peers? We will compare Adecco Group to related businesses based on the strength of its earnings, dividends, risk, analyst recommendations, valuation, profitability and institutional ownership.

Volatility and Risk

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Adecco Group has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500. Comparatively, Adecco Group’s peers have a beta of 1.18, suggesting that their average share price is 18% more volatile than the S&P 500.

Valuation & Earnings

This table compares Adecco Group and its peers revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Adecco Group $26.73 billion $890.67 million 13.25
Adecco Group Competitors $4.22 billion $126.12 million 11.17

Adecco Group has higher revenue and earnings than its peers. Adecco Group is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Dividends

Adecco Group pays an annual dividend of $0.44 per share and has a dividend yield of 1.3%. Adecco Group pays out 16.7% of its earnings in the form of a dividend. As a group, “Help supply services” companies pay a dividend yield of 1.5% and pay out 28.2% of their earnings in the form of a dividend.

Institutional & Insider Ownership

0.2% of Adecco Group shares are held by institutional investors. Comparatively, 62.2% of shares of all “Help supply services” companies are held by institutional investors. 20.3% of shares of all “Help supply services” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Adecco Group and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Adecco Group 3.33% 22.13% 7.98%
Adecco Group Competitors 1.97% 16.27% 6.03%

Analyst Ratings

This is a breakdown of current ratings and target prices for Adecco Group and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Adecco Group 1 0 0 0 1.00
Adecco Group Competitors 74 335 554 11 2.52

As a group, “Help supply services” companies have a potential upside of 9.64%. Given Adecco Group’s peers stronger consensus rating and higher probable upside, analysts plainly believe Adecco Group has less favorable growth aspects than its peers.

Summary

Adecco Group peers beat Adecco Group on 8 of the 15 factors compared.

Adecco Group Company Profile

Adecco Group AG, together with its subsidiaries, provides workforce solutions to businesses and organizations worldwide. The company provides temporary staffing, permanent placement, and outsourcing services for clerical and support personnel in the areas of office-based employment; and candidates for blue collar job profiles across various industrial sectors under the Adecco brand. It also offers professional staffing services in the information technology, and engineering and technical business lines primarily under the brand name of Modis; finance and legal business line under the Badenoch & Clark brand name; and medical and science business line. In addition, the company provides managed service provision and recruitment process outsourcing solutions under the brand name of Pontoon; career transition under the Lee Hecht Harrison brand name; and talent development services, such as leadership coaching, career development programs, assessment and feedback tools, and change management support under the Lee Hecht Harrison brand name. It operated approximately 5,100 branches in 60 countries and territories. The company was formerly known as Adecco S.A. Adecco Group AG was founded in 1957 and is headquartered in Opfikon, Switzerland.

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