Automatic Data Processing (ADP) versus Its Competitors Financial Comparison
Automatic Data Processing (NASDAQ: ADP) is one of 184 publicly-traded companies in the “IT Services & Consulting” industry, but how does it compare to its rivals? We will compare Automatic Data Processing to related businesses based on the strength of its profitability, valuation, analyst recommendations, dividends, earnings, risk and institutional ownership.
Insider & Institutional Ownership
79.7% of Automatic Data Processing shares are owned by institutional investors. Comparatively, 63.0% of shares of all “IT Services & Consulting” companies are owned by institutional investors. 0.3% of Automatic Data Processing shares are owned by insiders. Comparatively, 15.9% of shares of all “IT Services & Consulting” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares Automatic Data Processing and its rivals top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||NetIncome||Price/Earnings Ratio|
|Automatic Data Processing||$12.38 billion||$1.73 billion||28.52|
|Automatic Data Processing Competitors||$2.79 billion||$290.83 million||719.87|
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.
This table compares Automatic Data Processing and its rivals’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Automatic Data Processing||14.08%||42.34%||4.28%|
|Automatic Data Processing Competitors||-14.22%||-255.45%||-2.67%|
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 58.0% of its earnings in the form of a dividend. As a group, “IT Services & Consulting” companies pay a dividend yield of 1.7% and pay out 38.2% of their earnings in the form of a dividend.
Volatility and Risk
Automatic Data Processing has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500. Comparatively, Automatic Data Processing’s rivals have a beta of 1.12, indicating that their average share price is 12% more volatile than the S&P 500.
This is a summary of recent recommendations and price targets for Automatic Data Processing and its rivals, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Automatic Data Processing||0||12||3||0||2.20|
|Automatic Data Processing Competitors||714||4594||7333||164||2.54|
Automatic Data Processing currently has a consensus price target of $111.15, suggesting a potential downside of 0.83%. As a group, “IT Services & Consulting” companies have a potential upside of 5.54%. Given Automatic Data Processing’s rivals stronger consensus rating and higher possible upside, analysts plainly believe Automatic Data Processing has less favorable growth aspects than its rivals.
Automatic Data Processing rivals beat Automatic Data Processing on 8 of the 15 factors compared.
About Automatic Data Processing
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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