Paychex (PAYX) Competitors

Paychex (NASDAQ:PAYX) and Automatic Data Processing (NASDAQ:ADP) are both large-cap business services companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, media sentiment, community ranking, risk, valuation, analyst recommendations, dividends, earnings and profitability.

Which has higher valuation and earnings, PAYX or ADP?

Automatic Data Processing has higher revenue and earnings than Paychex. Paychex is trading at a lower price-to-earnings ratio than Automatic Data Processing, indicating that it is currently the more affordable of the two stocks.

Company	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Paychex	$5.44B	10.34	$1.69B	$4.80	32.55
Automatic Data Processing	$19.04B	6.88	$3.75B	$9.77	33.02

Is PAYX or ADP a better dividend stock?

Paychex pays an annual dividend of $4.32 per share and has a dividend yield of 2.8%. Automatic Data Processing pays an annual dividend of $6.16 per share and has a dividend yield of 1.9%. Paychex pays out 90.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Automatic Data Processing pays out 63.1% of its earnings in the form of a dividend. Paychex has increased its dividend for 3 consecutive years and Automatic Data Processing has increased its dividend for 49 consecutive years.

Does the media refer more to PAYX or ADP?

In the previous week, Automatic Data Processing had 1 more articles in the media than Paychex. MarketBeat recorded 36 mentions for Automatic Data Processing and 35 mentions for Paychex. Paychex's average media sentiment score of 1.31 beat Automatic Data Processing's score of 1.28 indicating that Paychex is being referred to more favorably in the media.

Company	Very Positive	Positive	Neutral	Negative	Very Negative	Overall Sentiment
Paychex	29 Very Positive mention(s)	1 Positive mention(s)	4 Neutral mention(s)	0 Negative mention(s)	1 Very Negative mention(s)	Positive
Automatic Data Processing	26 Very Positive mention(s)	2 Positive mention(s)	7 Neutral mention(s)	0 Negative mention(s)	0 Very Negative mention(s)	Positive

Do insiders & institutionals believe in PAYX or ADP?

83.5% of Paychex shares are held by institutional investors. Comparatively, 80.0% of Automatic Data Processing shares are held by institutional investors. 11.4% of Paychex shares are held by insiders. Comparatively, 0.2% of Automatic Data Processing shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Which has more risk and volatility, PAYX or ADP?

Paychex has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, Automatic Data Processing has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500.

Is PAYX or ADP more profitable?

Paychex has a net margin of 32.02% compared to Automatic Data Processing's net margin of 19.76%. Automatic Data Processing's return on equity of 80.86% beat Paychex's return on equity.

Company	Net Margins	Return on Equity	Return on Assets
Paychex	32.02%	45.28%	15.61%
Automatic Data Processing	19.76%	80.86%	6.83%

Do analysts rate PAYX or ADP?

Paychex currently has a consensus price target of $141.00, suggesting a potential downside of 9.74%. Automatic Data Processing has a consensus price target of $305.64, suggesting a potential downside of 5.27%. Given Automatic Data Processing's stronger consensus rating and higher possible upside, analysts plainly believe Automatic Data Processing is more favorable than Paychex.

Company	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Paychex	2 Sell rating(s)	10 Hold rating(s)	0 Buy rating(s)	0 Strong Buy rating(s)	1.83
Automatic Data Processing	1 Sell rating(s)	7 Hold rating(s)	3 Buy rating(s)	0 Strong Buy rating(s)	2.18

Does the MarketBeat Community favor PAYX or ADP?

Automatic Data Processing received 299 more outperform votes than Paychex when rated by MarketBeat users. Likewise, 57.94% of users gave Automatic Data Processing an outperform vote while only 41.33% of users gave Paychex an outperform vote.

Company	Underperform	Outperform
Paychex	Outperform Votes 343 41.33%	Underperform Votes 487 58.67%
Automatic Data Processing	Outperform Votes 642 57.94%	Underperform Votes 466 42.06%

Summary

Automatic Data Processing beats Paychex on 13 of the 21 factors compared between the two stocks.