Critical Comparison: TriNet Group (NYSE:TNET) and Adecco (OTCMKTS:AHEXY)

TriNet Group (NYSE:TNET) and Adecco (OTCMKTS:AHEXY) are both mid-cap industrials companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, risk, valuation, earnings, analyst recommendations, profitability and dividends.

Institutional and Insider Ownership

96.8% of TriNet Group shares are owned by institutional investors. 40.0% of TriNet Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

TriNet Group has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, Adecco has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500.

Dividends

TriNet Group pays an annual dividend of $1.16 per share and has a dividend yield of 1.7%. Adecco pays an annual dividend of $0.34 per share and has a dividend yield of 2.4%. TriNet Group pays out 31.4% of its earnings in the form of a dividend. Adecco pays out 33.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. TriNet Group has increased its dividend for 1 consecutive years.

Profitability

This table compares TriNet Group and Adecco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TriNet Group	3.56%	202.90%	5.74%
Adecco	1.25%	12.67%	3.62%

Analyst Ratings

This is a summary of current ratings and target prices for TriNet Group and Adecco, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TriNet Group	1	5	1	0	2.00
Adecco	2	4	1	1	2.12

TriNet Group currently has a consensus price target of $60.83, indicating a potential downside of 8.85%. Given TriNet Group’s higher probable upside, equities analysts clearly believe TriNet Group is more favorable than Adecco.

Earnings & Valuation

This table compares TriNet Group and Adecco”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TriNet Group	$5.01 billion	0.61	$155.00 million	$3.69	18.09
Adecco	$26.11 billion	0.19	$333.76 million	$1.01	14.11

Adecco has higher revenue and earnings than TriNet Group. Adecco is trading at a lower price-to-earnings ratio than TriNet Group, indicating that it is currently the more affordable of the two stocks.

Summary

TriNet Group beats Adecco on 12 of the 17 factors compared between the two stocks.

About TriNet Group

TriNet Group, Inc. provides comprehensive and flexible human capital management services for small and medium size businesses in the United States. The company offers multi-state payroll processing and tax administration; employee benefits programs, including health insurance and retirement plans; workers compensation insurance and claims management; employment and benefits law compliance; and other HR related services. It also provides technology platform, an online and mobile tool that allows users to store, view, and manager HR information and administer various HR transactions, such as payroll processing, tax administration and credits, employee onboarding and termination, employee performance, time and attendance, compensation reporting, expense management, and benefits enrollment and administration, as well as incorporated workforce analytics and allows professional employer organization clients to generate HR data, payroll, compensation, and other custom reports. The company serves clients in various industries, including technology, professional services, financial services, life sciences, and not-for-profit. It sells its solutions through its direct sales organization. TriNet Group, Inc. was incorporated in 1988 and is headquartered in Dublin, California.

About Adecco

Adecco Group AG, together with its subsidiaries, provides human resource services to businesses and organizations in Europe, North America, Asia Pacific, South America, and North Africa. It offers flexible placement, permanent placement, outsourcing, training, upskilling and reskilling, career transition and workforce transformation, consulting, talent academy, digital staffing solutions under the Adecco, Akkodis, General Assembly, Badenoch + Clark, Lee Hecht Harrison, pontoon, Spring Professional, Adia, Modis, and YOSS brand names. The company also operates Hired, a talent recruitment platform. The company was formerly known as Adecco S.A. Adecco Group AG was founded in 1957 and is based in Zurich, Switzerland.