ADP vs. PAYX: A Head-to-Head Stock Comparison
Updated onHere’s a clear look at ADP and PAYX, 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 PAYX’s 52.99 billion USD, indicating a significant difference in their market valuations.
With betas of 0.80 for ADP and 0.91 for PAYX, both stocks show similar sensitivity to overall market movements.
| Symbol | ADP | PAYX |
|---|---|---|
| Company Name | Automatic Data Processing, Inc. | Paychex, Inc. |
| Country | US | US |
| Sector | Industrials | Industrials |
| Industry | Staffing & Employment Services | Staffing & Employment Services |
| CEO | Maria Black | John B. Gibson Jr. |
| Price | 309.2 USD | 147.13 USD |
| Market Cap | 125.51 billion USD | 52.99 billion USD |
| Beta | 0.80 | 0.91 |
| Exchange | NASDAQ | NASDAQ |
| IPO Date | March 17, 1980 | August 26, 1983 |
| ADR | No | No |
Historical Performance
This chart compares the performance of ADP and PAYX 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.
PAYX
41.38%
Staffing & Employment Services Industry
- Max
- 76.78%
- Q3
- 46.63%
- Median
- 19.55%
- Q1
- 6.99%
- Min
- -1.64%
PAYX’s Return on Equity of 41.38% is on par with the norm for the Staffing & Employment Services industry, indicating its profitability relative to shareholder equity is typical for the sector.
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.
PAYX
16.77%
Staffing & Employment Services Industry
- Max
- 23.22%
- Q3
- 18.16%
- Median
- 9.93%
- Q1
- 4.57%
- Min
- -1.94%
PAYX’s Return on Invested Capital of 16.77% is in line with the norm for the Staffing & Employment Services industry, reflecting a standard level of efficiency in generating profits from its capital base.
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.
PAYX
29.74%
Staffing & Employment Services Industry
- Max
- 30.46%
- Q3
- 17.07%
- Median
- 3.53%
- Q1
- 0.98%
- Min
- -4.15%
A Net Profit Margin of 29.74% places PAYX in the upper quartile for the Staffing & Employment Services 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.
PAYX
39.62%
Staffing & Employment Services Industry
- Max
- 19.92%
- Q3
- 12.35%
- Median
- 4.95%
- Q1
- 2.59%
- Min
- -2.06%
PAYX’s Operating Profit Margin of 39.62% is exceptionally high, placing it well above the typical range for the Staffing & Employment Services industry. This demonstrates outstanding efficiency in managing its core operations, which can be a result of strong pricing power or superior cost control.
Profitability at a Glance
| Symbol | ADP | PAYX |
|---|---|---|
| Return on Equity (TTM) | 76.78% | 41.38% |
| Return on Assets (TTM) | 7.08% | 10.01% |
| Return on Invested Capital (TTM) | 23.22% | 16.77% |
| Net Profit Margin (TTM) | 19.79% | 29.74% |
| Operating Profit Margin (TTM) | 17.38% | 39.62% |
| Gross Profit Margin (TTM) | 47.09% | 72.35% |
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.
PAYX
1.28
Staffing & Employment Services Industry
- Max
- 2.06
- Q3
- 2.01
- Median
- 1.65
- Q1
- 1.15
- Min
- 1.02
PAYX’s Current Ratio of 1.28 aligns with the median group of the Staffing & Employment Services 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.
PAYX
0.11
Staffing & Employment Services Industry
- Max
- 0.73
- Q3
- 0.70
- Median
- 0.22
- Q1
- 0.11
- Min
- 0.02
PAYX’s Debt-to-Equity Ratio of 0.11 is typical for the Staffing & Employment Services industry, indicating its use of leverage is in line with the sector norm. This suggests a balanced approach to its capital structure.
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.
PAYX
-100.35
Staffing & Employment Services Industry
- Max
- 7.90
- Q3
- 7.90
- Median
- 2.91
- Q1
- -0.32
- Min
- -1.17
PAYX has a negative Interest Coverage Ratio of -100.35. This indicates that its earnings were insufficient to cover even its operational costs, let alone its interest payments, signaling significant financial distress.
Financial Strength at a Glance
| Symbol | ADP | PAYX |
|---|---|---|
| Current Ratio (TTM) | 1.02 | 1.28 |
| Quick Ratio (TTM) | 1.02 | 1.28 |
| Debt-to-Equity Ratio (TTM) | 0.73 | 0.11 |
| Debt-to-Asset Ratio (TTM) | 0.08 | 0.03 |
| Net Debt-to-EBITDA Ratio (TTM) | 0.26 | -0.48 |
| Interest Coverage Ratio (TTM) | 7.90 | -100.35 |
Growth
The following charts compare key year-over-year (YoY) growth metrics for ADP and PAYX. 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.
PAYX
2.73%
Staffing & Employment Services Industry
- Max
- 5.58%
- Q3
- 3.50%
- Median
- 2.08%
- Q1
- 0.83%
- Min
- 0.00%
PAYX’s Dividend Yield of 2.73% is consistent with its peers in the Staffing & Employment Services industry, providing a dividend return that is standard for its sector.
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.
PAYX
87.40%
Staffing & Employment Services Industry
- Max
- 161.25%
- Q3
- 109.23%
- Median
- 58.73%
- Q1
- 15.69%
- Min
- 0.00%
PAYX’s Dividend Payout Ratio of 87.40% is within the typical range for the Staffing & Employment Services industry, suggesting a balanced approach between shareholder payouts and company reinvestment.
Dividend at a Glance
| Symbol | ADP | PAYX |
|---|---|---|
| Dividend Yield (TTM) | 1.95% | 2.73% |
| Dividend Payout Ratio (TTM) | 58.73% | 87.40% |
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.
PAYX
31.99
Staffing & Employment Services Industry
- Max
- 35.74
- Q3
- 30.98
- Median
- 20.51
- Q1
- 15.65
- Min
- 7.85
A P/E Ratio of 31.99 places PAYX 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.
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.
PAYX
3.98
Staffing & Employment Services Industry
- Max
- 3.23
- Q3
- 1.89
- Median
- 1.18
- Q1
- 1.00
- Min
- 0.39
PAYX’s Forward PEG Ratio of 3.98 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.
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.
PAYX
9.51
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 9.51, PAYX 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.
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.
PAYX
12.84
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.
Valuation at a Glance
| Symbol | ADP | PAYX |
|---|---|---|
| Price-to-Earnings Ratio (P/E, TTM) | 31.47 | 31.99 |
| Forward PEG Ratio (TTM) | 3.56 | 3.98 |
| Price-to-Sales Ratio (P/S, TTM) | 6.21 | 9.51 |
| Price-to-Book Ratio (P/B, TTM) | 21.49 | 12.84 |
| Price-to-Free Cash Flow Ratio (P/FCF, TTM) | 27.77 | 29.93 |
| EV-to-EBITDA (TTM) | 20.57 | 21.75 |
| EV-to-Sales (TTM) | 6.29 | 9.30 |