Paychex (PAYX) Competitors

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

Which has higher earnings and valuation, ADP or PAYX?

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
Automatic Data Processing	$18.78B	6.38	$3.75B	$9.59	30.65
Paychex	$5.44B	9.48	$1.69B	$4.80	29.83

Is ADP or PAYX a better dividend stock?

Automatic Data Processing pays an annual dividend of $6.16 per share and has a dividend yield of 2.1%. Paychex pays an annual dividend of $3.92 per share and has a dividend yield of 2.7%. Automatic Data Processing pays out 64.2% of its earnings in the form of a dividend. Paychex pays out 81.7% 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 has increased its dividend for 49 consecutive years.

Does the MarketBeat Community favor ADP or PAYX?

Automatic Data Processing received 298 more outperform votes than Paychex when rated by MarketBeat users. Likewise, 58.11% of users gave Automatic Data Processing an outperform vote while only 41.33% of users gave Paychex an outperform vote.

Company	Underperform	Outperform
Automatic Data Processing	Outperform Votes 641 58.11%	Underperform Votes 462 41.89%
Paychex	Outperform Votes 343 41.33%	Underperform Votes 487 58.67%

Does the media refer more to ADP or PAYX?

In the previous week, Automatic Data Processing had 2 more articles in the media than Paychex. MarketBeat recorded 32 mentions for Automatic Data Processing and 30 mentions for Paychex. Automatic Data Processing's average media sentiment score of 1.71 beat Paychex's score of 1.16 indicating that Automatic Data Processing is being referred to more favorably in the media.

Company	Very Positive	Positive	Neutral	Negative	Very Negative	Overall Sentiment
Automatic Data Processing	31 Very Positive mention(s)	0 Positive mention(s)	1 Neutral mention(s)	0 Negative mention(s)	0 Very Negative mention(s)	Very Positive
Paychex	23 Very Positive mention(s)	0 Positive mention(s)	6 Neutral mention(s)	1 Negative mention(s)	0 Very Negative mention(s)	Positive

Is ADP or PAYX 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
Automatic Data Processing	19.76%	80.86%	6.83%
Paychex	32.02%	45.28%	15.61%

Do analysts rate ADP or PAYX?

Automatic Data Processing presently has a consensus target price of $302.30, indicating a potential upside of 2.84%. Paychex has a consensus target price of $141.00, indicating a potential downside of 1.52%. Given Automatic Data Processing's stronger consensus rating and higher probable upside, equities research analysts clearly believe Automatic Data Processing is more favorable than Paychex.

Company	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Automatic Data Processing	1 Sell rating(s)	7 Hold rating(s)	2 Buy rating(s)	0 Strong Buy rating(s)	2.10
Paychex	2 Sell rating(s)	10 Hold rating(s)	0 Buy rating(s)	0 Strong Buy rating(s)	1.83

Do insiders and institutionals hold more shares of ADP or PAYX?

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

Which has more volatility & risk, ADP or PAYX?

Automatic Data Processing has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500. Comparatively, Paychex has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500.

Summary

Automatic Data Processing beats Paychex on 14 of the 21 factors compared between the two stocks.