Reviewing TeleTech (TTEC) & Automatic Data Processing (ADP)
TeleTech (NASDAQ: TTEC) and Automatic Data Processing (NASDAQ:ADP) are both business services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, earnings, institutional ownership, valuation and risk.
TeleTech pays an annual dividend of $0.50 per share and has a dividend yield of 1.2%. Automatic Data Processing pays an annual dividend of $2.52 per share and has a dividend yield of 2.1%. TeleTech pays out 47.6% of its earnings in the form of a dividend. Automatic Data Processing pays out 64.0% 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.
This is a summary of recent ratings and price targets for TeleTech and Automatic Data Processing, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Automatic Data Processing||0||10||5||0||2.33|
TeleTech currently has a consensus target price of $43.00, suggesting a potential upside of 6.97%. Automatic Data Processing has a consensus target price of $113.23, suggesting a potential downside of 4.20%. Given TeleTech’s higher possible upside, equities research analysts plainly believe TeleTech is more favorable than Automatic Data Processing.
This table compares TeleTech and Automatic Data Processing’s 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%|
Valuation and Earnings
This table compares TeleTech and Automatic Data Processing’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|TeleTech||$1.28 billion||1.45||$33.67 million||$1.05||38.29|
|Automatic Data Processing||$12.38 billion||4.23||$1.73 billion||$3.94||30.00|
Automatic Data Processing has higher revenue and earnings than TeleTech. Automatic Data Processing is trading at a lower price-to-earnings ratio than TeleTech, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
24.9% of TeleTech shares are owned by institutional investors. Comparatively, 78.8% of Automatic Data Processing shares are owned by institutional investors. 70.0% of TeleTech shares are owned by insiders. Comparatively, 0.3% of Automatic Data Processing shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Volatility and Risk
TeleTech has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500. Comparatively, Automatic Data Processing has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500.
Automatic Data Processing beats TeleTech on 11 of the 16 factors compared between the two stocks.
TeleTech Company Profile
TeleTech Holdings, Inc. (TeleTech) is a customer service provider that delivers consulting, technology, growth and customer care solutions on a global scale. The Company operates through four segments: Customer Management Services (CMS), Customer Growth Services (CGS), Customer Technology Services (CTS) and Customer Strategy Services (CSS). The CMS segment designs and manages clients’ front-to-back office processes to deliver just-in-time, personalized, multi-channel interactions. The CGS segment offers integrated sales and marketing solutions to help its clients in the business-to-consumer or business-to-business markets. The CTS segment includes operational and system design consulting, customer experience technology product, implementation and integration consulting services, and management of clients cloud and on premise solutions. The CSS segment provides professional services in customer experience strategy, and system and operational process optimization.
Automatic Data Processing Company Profile
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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