Head-To-Head Review: Accenture PLC (ACN) & Automatic Data Processing (ADP)

Accenture PLC (NYSE: ACN) and Automatic Data Processing (NYSE:ADP) are both business services companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, valuation, analyst recommendations, institutional ownership and risk.

Profitability

This table compares Accenture PLC and Automatic Data Processing’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Accenture PLC 9.37% 42.65% 17.82%
Automatic Data Processing 8.67% 26.39% 2.63%

Analyst Ratings

This is a breakdown of current ratings and target prices for Accenture PLC and Automatic Data Processing, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Accenture PLC 1 8 12 0 2.52
Automatic Data Processing 1 11 3 0 2.13

Accenture PLC presently has a consensus price target of $141.74, suggesting a potential downside of 1.60%. Automatic Data Processing has a consensus price target of $110.08, suggesting a potential downside of 1.93%. Given Accenture PLC’s stronger consensus rating and higher possible upside, research analysts clearly believe Accenture PLC is more favorable than Automatic Data Processing.

Dividends

Accenture PLC pays an annual dividend of $2.66 per share and has a dividend yield of 1.8%. Automatic Data Processing does not pay a dividend. Accenture PLC pays out 48.9% of its earnings in the form of a dividend. Accenture PLC has increased its dividend for 7 consecutive years and Automatic Data Processing has increased its dividend for 42 consecutive years.

Valuation and Earnings

This table compares Accenture PLC and Automatic Data Processing’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Accenture PLC $36.77 billion 2.41 $3.45 billion $5.44 26.48
Automatic Data Processing N/A N/A N/A N/A N/A

Accenture PLC has higher revenue and earnings than Automatic Data Processing.

Insider & Institutional Ownership

77.8% of Accenture PLC shares are owned by institutional investors. 0.2% of Accenture PLC shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Accenture PLC beats Automatic Data Processing on 10 of the 12 factors compared between the two stocks.

Accenture PLC Company Profile

Accenture plc is a professional services company serving clients in various industries and in geographic regions, including North America, Europe and Growth Markets. The Company provides management and technology consulting services. Its segments include Communications, Media and Technology; Financial Services; Health and Public Service; Products, and Resources. The Communications, Media & Technology segment serves communications, electronics, technology, media and entertainment industries. The Financial Services segment serves banking, capital markets and insurance industries. The Health & Public service segment serves healthcare payers and providers, and government departments and agencies, public service organizations, educational institutions and non-profit organizations. The Products segment serves a set of interconnected consumer-relevant industries. The Resources segment serves chemicals, energy, forest products, metals and mining, utilities and related industries.

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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