Automatic Data Processing (NASDAQ: ADP) is one of 176 publicly-traded 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 analyst recommendations, institutional ownership, dividends, risk, profitability, valuation and earnings.

Earnings & Valuation

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

Gross Revenue NetIncome Price/Earnings Ratio
Automatic Data Processing $12.38 billion $1.73 billion 28.18
Automatic Data Processing Competitors $2.79 billion $290.83 million 72.95

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.

Dividends

Automatic Data Processing pays an annual dividend of $2.28 per share and has a dividend yield of 2.1%. 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 37.1% of their earnings in the form of a dividend.

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 14.08% 42.34% 4.28%
Automatic Data Processing Competitors -20.95% -266.67% -4.00%

Volatility and Risk

Automatic Data Processing has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500. Comparatively, Automatic Data Processing’s competitors have a beta of 1.10, indicating that their average share price is 10% more volatile than the S&P 500.

Insider and Institutional Ownership

79.7% of Automatic Data Processing shares are owned by institutional investors. Comparatively, 61.5% 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, 16.4% of shares of all “IT Services & Consulting” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

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 702 4405 7125 161 2.54

Automatic Data Processing currently has a consensus target price of $111.15, indicating a potential upside of 0.11%. As a group, “IT Services & Consulting” companies have a potential upside of 2.64%. Given Automatic Data Processing’s competitors stronger consensus rating and higher possible 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.

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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