Automatic Data Processing (NASDAQ: ADP) is one of 179 publicly-traded companies in the “IT Services & Consulting” industry, but how does it weigh in compared to its rivals? We will compare Automatic Data Processing to related companies based on the strength of its analyst recommendations, institutional ownership, risk, dividends, earnings, valuation and profitability.

Profitability

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 -19.06% -258.48% -2.83%

Earnings & Valuation

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

Gross Revenue Net Income Price/Earnings Ratio
Automatic Data Processing $12.38 billion $1.73 billion 29.98
Automatic Data Processing Competitors $2.79 billion $290.02 million 306.86

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.

Analyst Ratings

This is a breakdown of recent ratings for Automatic Data Processing and its rivals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Automatic Data Processing 0 10 5 0 2.33
Automatic Data Processing Competitors 723 4572 7318 164 2.54

Automatic Data Processing currently has a consensus price target of $113.23, suggesting a potential downside of 3.90%. As a group, “IT Services & Consulting” companies have a potential upside of 1.88%. 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.

Institutional & Insider Ownership

78.8% 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 hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

Automatic Data Processing pays an annual dividend of $2.52 per share and has a dividend yield of 2.1%. Automatic Data Processing pays out 64.1% 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 37.9% of their earnings in the form of a dividend.

Risk and Volatility

Automatic Data Processing has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500. Comparatively, Automatic Data Processing’s rivals have a beta of 1.12, meaning that their average stock price is 12% more volatile than the S&P 500.

Summary

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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