Automatic Data Processing (NASDAQ:ADP) and Computer Services (OTCMKTS:CSVI) are both business services companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, profitability, earnings, dividends, institutional ownership, analyst recommendations and risk.
Insider and Institutional Ownership
80.5% of Automatic Data Processing shares are owned by institutional investors. Comparatively, 0.9% of Computer Services shares are owned by institutional investors. 0.3% of Automatic Data Processing shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This table compares Automatic Data Processing and Computer Services’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Automatic Data Processing||13.12%||51.92%||5.59%|
Valuation and Earnings
This table compares Automatic Data Processing and Computer Services’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Automatic Data Processing||$13.33 billion||5.34||$1.62 billion||$4.35||37.54|
|Computer Services||$249.56 million||3.33||$38.83 million||N/A||N/A|
Automatic Data Processing has higher revenue and earnings than Computer Services.
This is a breakdown of current ratings and target prices for Automatic Data Processing and Computer Services, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Automatic Data Processing||0||7||7||0||2.50|
Automatic Data Processing currently has a consensus target price of $154.00, indicating a potential downside of 5.70%. Given Automatic Data Processing’s higher probable upside, equities research analysts clearly believe Automatic Data Processing is more favorable than Computer Services.
Risk & Volatility
Automatic Data Processing has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500. Comparatively, Computer Services has a beta of 0.48, indicating that its stock price is 52% less volatile than the S&P 500.
Automatic Data Processing pays an annual dividend of $3.16 per share and has a dividend yield of 1.9%. Computer Services pays an annual dividend of $1.44 per share and has a dividend yield of 2.4%. Automatic Data Processing pays out 72.6% of its earnings in the form of a dividend. Automatic Data Processing has increased its dividend for 44 consecutive years.
Automatic Data Processing beats Computer Services on 10 of the 14 factors compared between the two stocks.
Automatic Data Processing Company Profile
Automatic Data Processing, Inc. provides business process outsourcing services worldwide. It operates through two segments, Employer Services and Professional Employer Organization (PEO) Services. The Employer Services segment offers various human resources (HR) outsourcing and technology-based human capital management solutions. Its offerings include payroll, benefits administration, talent management, HR management, time and attendance management, insurance, retirement, and compliance services. This segment provides a range of solutions, which businesses of various types and sizes can use to activate talent, as well as recruit, pay, manage, and retain their workforce. It serves approximately 630,000 clients through its cloud-based strategic software as a service offering. The PEO Services segment provides HR outsourcing solutions through a co-employment model. This segment offers HR administration services, including employee recruitment, payroll and tax administration, time and attendance management, benefits administration, employee training and development, online HR management tools, and employee leave administration. It also provides employee benefits that enable eligible worksite employees with access to a 401(k) retirement savings plan, health savings accounts, flexible spending accounts, group term life and disability coverage, and an employee assistance program, as well as group health, dental, and vision coverage. In addition, this segment offers employer liability management services comprising workers' compensation program, unemployment claims management, safety compliance guidance and access to safety training, access to employment practices liability insurance, and guidance on compliance with the United States federal, state, and local employment laws and regulations. The company was founded in 1949 and is headquartered in Roseland, New Jersey.
Computer Services Company Profile
Computer Services, Inc., together with its subsidiaries, delivers core processing, digital banking, managed services, payments processing, print and electronic distribution, and regulatory compliance solutions to financial institutions and corporate entities in the United States. It provides processing, maintenance, and support services; software licensing and installation services; professional services; and e-business services, as well as equipment and supply sales. The company also offers integrated banking solutions, which include mobile and Internet banking; check imaging; cash management; branch and merchant capture; print and mail, and online document delivery services; corporate intranets; secure Web hosting; e-messaging; teller and platform services; ATM and debit card service and support; payments solutions; risk assessment; network management; cloud-based managed services; and compliance software and services for regulatory compliance, homeland security, anti-money laundering, anti-terrorism financing, and fraud prevention. It provides its products and services to community banks, regional banks, and multi-bank holding companies, as well as to various other business enterprises. Computer Services, Inc. was incorporated in 1965 and is headquartered in Paducah, Kentucky.
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