ADP vs. ITW: A Head-to-Head Stock Comparison
Updated onHere’s a clear look at ADP and ITW, comparing key factors like historical performance, profitability, financial strength, growth, dividend, and valuation.
Company Overview
ADP’s market capitalization of 125.51 billion USD is substantially larger than ITW’s 75.74 billion USD, indicating a significant difference in their market valuations.
With betas of 0.80 for ADP and 1.12 for ITW, both stocks show similar sensitivity to overall market movements.
| Symbol | ADP | ITW |
|---|---|---|
| Company Name | Automatic Data Processing, Inc. | Illinois Tool Works Inc. |
| Country | US | US |
| Sector | Industrials | Industrials |
| Industry | Staffing & Employment Services | Industrial - Machinery |
| CEO | Maria Black | Christopher A. O'Herlihy |
| Price | 309.2 USD | 258.5 USD |
| Market Cap | 125.51 billion USD | 75.74 billion USD |
| Beta | 0.80 | 1.12 |
| Exchange | NASDAQ | NYSE |
| IPO Date | March 17, 1980 | March 13, 1973 |
| ADR | No | No |
Historical Performance
This chart compares the performance of ADP and ITW by tracking the growth of an initial $10,000 investment in each. Use the tabs to select the desired time period.
Data is adjusted for dividends and splits.
Profitability
Return on Equity
ADP
76.78%
Staffing & Employment Services Industry
- Max
- 76.78%
- Q3
- 46.63%
- Median
- 19.55%
- Q1
- 6.99%
- Min
- -1.64%
In the upper quartile for the Staffing & Employment Services industry, ADP’s Return on Equity of 76.78% signals a highly effective use of shareholder capital to drive profitability compared to most of its peers.
ITW
104.39%
Industrial - Machinery Industry
- Max
- 36.51%
- Q3
- 18.65%
- Median
- 12.08%
- Q1
- 4.75%
- Min
- -15.57%
ITW’s Return on Equity of 104.39% is exceptionally high, placing it well beyond the typical range for the Industrial - Machinery industry. This demonstrates a superior ability to generate profit from shareholder investments, though it could also be inflated by high financial leverage.
Return on Invested Capital
ADP
23.22%
Staffing & Employment Services Industry
- Max
- 23.22%
- Q3
- 18.16%
- Median
- 9.93%
- Q1
- 4.57%
- Min
- -1.94%
In the upper quartile for the Staffing & Employment Services industry, ADP’s Return on Invested Capital of 23.22% signifies a highly effective use of its capital to generate profits when compared to its peers.
ITW
25.61%
Industrial - Machinery Industry
- Max
- 22.35%
- Q3
- 12.64%
- Median
- 9.33%
- Q1
- 5.32%
- Min
- -5.42%
ITW’s Return on Invested Capital of 25.61% is exceptionally high, placing it well beyond the typical range for the Industrial - Machinery industry. This demonstrates an outstanding ability to deploy capital efficiently and create significant value.
Net Profit Margin
ADP
19.79%
Staffing & Employment Services Industry
- Max
- 30.46%
- Q3
- 17.07%
- Median
- 3.53%
- Q1
- 0.98%
- Min
- -4.15%
A Net Profit Margin of 19.79% places ADP in the upper quartile for the Staffing & Employment Services industry, signifying strong profitability and more effective cost management than most of its peers.
ITW
21.37%
Industrial - Machinery Industry
- Max
- 28.85%
- Q3
- 15.25%
- Median
- 10.02%
- Q1
- 5.33%
- Min
- -8.75%
A Net Profit Margin of 21.37% places ITW in the upper quartile for the Industrial - Machinery industry, signifying strong profitability and more effective cost management than most of its peers.
Operating Profit Margin
ADP
17.38%
Staffing & Employment Services Industry
- Max
- 19.92%
- Q3
- 12.35%
- Median
- 4.95%
- Q1
- 2.59%
- Min
- -2.06%
An Operating Profit Margin of 17.38% places ADP in the upper quartile for the Staffing & Employment Services industry. This signals a strong ability to translate revenue into operating profit, outperforming most of its competitors in core business efficiency.
ITW
25.93%
Industrial - Machinery Industry
- Max
- 28.19%
- Q3
- 19.04%
- Median
- 14.62%
- Q1
- 8.13%
- Min
- -5.76%
An Operating Profit Margin of 25.93% places ITW in the upper quartile for the Industrial - Machinery industry. This signals a strong ability to translate revenue into operating profit, outperforming most of its competitors in core business efficiency.
Profitability at a Glance
| Symbol | ADP | ITW |
|---|---|---|
| Return on Equity (TTM) | 76.78% | 104.39% |
| Return on Assets (TTM) | 7.08% | 21.78% |
| Return on Invested Capital (TTM) | 23.22% | 25.61% |
| Net Profit Margin (TTM) | 19.79% | 21.37% |
| Operating Profit Margin (TTM) | 17.38% | 25.93% |
| Gross Profit Margin (TTM) | 47.09% | 43.55% |
Financial Strength
Current Ratio
ADP
1.02
Staffing & Employment Services Industry
- Max
- 2.06
- Q3
- 2.01
- Median
- 1.65
- Q1
- 1.15
- Min
- 1.02
ADP’s Current Ratio of 1.02 falls into the lower quartile for the Staffing & Employment Services industry. This indicates a tighter liquidity situation and a more constrained capacity to handle short-term debt than many of its competitors.
ITW
1.60
Industrial - Machinery Industry
- Max
- 4.18
- Q3
- 2.75
- Median
- 2.07
- Q1
- 1.46
- Min
- 0.46
ITW’s Current Ratio of 1.60 aligns with the median group of the Industrial - Machinery industry, indicating that its short-term liquidity is in line with its sector peers.
Debt-to-Equity Ratio
ADP
0.73
Staffing & Employment Services Industry
- Max
- 0.73
- Q3
- 0.70
- Median
- 0.22
- Q1
- 0.11
- Min
- 0.02
ADP’s leverage is in the upper quartile of the Staffing & Employment Services industry, with a Debt-to-Equity Ratio of 0.73. While this approach can boost equity growth, it also exposes the company to greater financial vulnerability.
ITW
2.55
Industrial - Machinery Industry
- Max
- 1.46
- Q3
- 0.73
- Median
- 0.48
- Q1
- 0.17
- Min
- 0.00
With a Debt-to-Equity Ratio of 2.55, ITW operates with exceptionally high leverage compared to the Industrial - Machinery industry norm. This suggests an aggressive reliance on debt financing, which can magnify returns but also significantly elevates financial risk.
Interest Coverage Ratio
ADP
7.90
Staffing & Employment Services Industry
- Max
- 7.90
- Q3
- 7.90
- Median
- 2.91
- Q1
- -0.32
- Min
- -1.17
ADP’s Interest Coverage Ratio of 7.90 is positioned comfortably within the norm for the Staffing & Employment Services industry, indicating a standard and healthy capacity to cover its interest payments.
ITW
14.60
Industrial - Machinery Industry
- Max
- 28.91
- Q3
- 14.99
- Median
- 9.11
- Q1
- 3.95
- Min
- -11.30
ITW’s Interest Coverage Ratio of 14.60 is positioned comfortably within the norm for the Industrial - Machinery industry, indicating a standard and healthy capacity to cover its interest payments.
Financial Strength at a Glance
| Symbol | ADP | ITW |
|---|---|---|
| Current Ratio (TTM) | 1.02 | 1.60 |
| Quick Ratio (TTM) | 1.02 | 1.16 |
| Debt-to-Equity Ratio (TTM) | 0.73 | 2.55 |
| Debt-to-Asset Ratio (TTM) | 0.08 | 0.53 |
| Net Debt-to-EBITDA Ratio (TTM) | 0.26 | 1.51 |
| Interest Coverage Ratio (TTM) | 7.90 | 14.60 |
Growth
The following charts compare key year-over-year (YoY) growth metrics for ADP and ITW. These metrics are based on the companies’ annual financial reports.
Revenue Growth
Earnings Per Share (EPS) Growth
Free Cash Flow Growth
Dividend
Dividend Yield
ADP
1.95%
Staffing & Employment Services Industry
- Max
- 5.58%
- Q3
- 3.50%
- Median
- 2.08%
- Q1
- 0.83%
- Min
- 0.00%
ADP’s Dividend Yield of 1.95% is consistent with its peers in the Staffing & Employment Services industry, providing a dividend return that is standard for its sector.
ITW
2.32%
Industrial - Machinery Industry
- Max
- 4.40%
- Q3
- 1.47%
- Median
- 0.74%
- Q1
- 0.00%
- Min
- 0.00%
With a Dividend Yield of 2.32%, ITW offers a more attractive income stream than most of its peers in the Industrial - Machinery industry, signaling a strong commitment to shareholder returns.
Dividend Payout Ratio
ADP
58.73%
Staffing & Employment Services Industry
- Max
- 161.25%
- Q3
- 109.23%
- Median
- 58.73%
- Q1
- 15.69%
- Min
- 0.00%
ADP’s Dividend Payout Ratio of 58.73% is within the typical range for the Staffing & Employment Services industry, suggesting a balanced approach between shareholder payouts and company reinvestment.
ITW
50.96%
Industrial - Machinery Industry
- Max
- 78.48%
- Q3
- 36.22%
- Median
- 20.24%
- Q1
- 0.00%
- Min
- 0.00%
ITW’s Dividend Payout Ratio of 50.96% is in the upper quartile for the Industrial - Machinery industry. This indicates a strong commitment to shareholder returns but also suggests that a smaller portion of earnings is retained for reinvestment compared to many peers.
Dividend at a Glance
| Symbol | ADP | ITW |
|---|---|---|
| Dividend Yield (TTM) | 1.95% | 2.32% |
| Dividend Payout Ratio (TTM) | 58.73% | 50.96% |
Valuation
Price-to-Earnings Ratio
ADP
31.47
Staffing & Employment Services Industry
- Max
- 35.74
- Q3
- 30.98
- Median
- 20.51
- Q1
- 15.65
- Min
- 7.85
A P/E Ratio of 31.47 places ADP in the upper quartile for the Staffing & Employment Services industry. This high valuation relative to peers suggests the market holds elevated expectations for the company’s future growth.
ITW
22.53
Industrial - Machinery Industry
- Max
- 47.62
- Q3
- 34.41
- Median
- 27.36
- Q1
- 21.62
- Min
- 10.96
ITW’s P/E Ratio of 22.53 is within the middle range for the Industrial - Machinery industry. This suggests its valuation is in line with the sector average, representing neither a significant premium nor a discount compared to its peers.
Forward P/E to Growth Ratio
ADP
3.56
Staffing & Employment Services Industry
- Max
- 3.23
- Q3
- 1.89
- Median
- 1.18
- Q1
- 1.00
- Min
- 0.39
ADP’s Forward PEG Ratio of 3.56 is exceptionally high for the Staffing & Employment Services industry. This suggests its stock price is very high relative to its expected earnings growth, signaling significant overvaluation risk.
ITW
3.97
Industrial - Machinery Industry
- Max
- 6.15
- Q3
- 3.53
- Median
- 2.82
- Q1
- 1.71
- Min
- 0.09
The Forward PEG Ratio is often not a primary valuation metric in the Industrial - Machinery industry.
Price-to-Sales Ratio
ADP
6.21
Staffing & Employment Services Industry
- Max
- 3.70
- Q3
- 2.09
- Median
- 0.86
- Q1
- 0.59
- Min
- 0.09
With a P/S Ratio of 6.21, ADP trades at a valuation that eclipses even the highest in the Staffing & Employment Services industry. This implies the market has priced in exceptionally optimistic scenarios for future revenue growth, posing considerable valuation risk.
ITW
4.80
Industrial - Machinery Industry
- Max
- 8.37
- Q3
- 4.59
- Median
- 3.34
- Q1
- 1.83
- Min
- 0.32
ITW’s P/S Ratio of 4.80 is in the upper echelon for the Industrial - Machinery industry. This means the company is valued richly on its revenue stream compared to its peers, suggesting the stock is priced for a high level of future performance.
Price-to-Book Ratio
ADP
21.49
Staffing & Employment Services Industry
- Max
- 21.09
- Q3
- 12.56
- Median
- 3.17
- Q1
- 1.96
- Min
- 0.33
The P/B Ratio is often not a primary valuation metric for the Staffing & Employment Services industry.
ITW
23.42
Industrial - Machinery Industry
- Max
- 7.49
- Q3
- 5.01
- Median
- 3.41
- Q1
- 2.45
- Min
- 0.01
At 23.42, ITW’s P/B Ratio is at an extreme premium to the Industrial - Machinery industry. This signifies that the market’s valuation is heavily reliant on future potential rather than its current net asset value, which can be a high-risk proposition.
Valuation at a Glance
| Symbol | ADP | ITW |
|---|---|---|
| Price-to-Earnings Ratio (P/E, TTM) | 31.47 | 22.53 |
| Forward PEG Ratio (TTM) | 3.56 | 3.97 |
| Price-to-Sales Ratio (P/S, TTM) | 6.21 | 4.80 |
| Price-to-Book Ratio (P/B, TTM) | 21.49 | 23.42 |
| Price-to-Free Cash Flow Ratio (P/FCF, TTM) | 27.77 | 26.61 |
| EV-to-EBITDA (TTM) | 20.57 | 16.94 |
| EV-to-Sales (TTM) | 6.29 | 5.27 |