Automatic Data Processing (NASDAQ:ADP) and Longfin (NASDAQ:LFIN) are both business services companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, risk, analyst recommendations, earnings, dividends and institutional ownership.
This table compares Automatic Data Processing and Longfin’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Automatic Data Processing||16.17%||47.48%||5.73%|
80.2% of Automatic Data Processing shares are owned by institutional investors. Comparatively, 2.7% of Longfin shares are owned by institutional investors. 0.3% of Automatic Data Processing shares are owned by company insiders. Comparatively, 55.2% of Longfin shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Automatic Data Processing and Longfin’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Automatic Data Processing||$14.18 billion||5.05||$2.29 billion||$5.45||30.29|
Automatic Data Processing has higher revenue and earnings than Longfin.
This is a summary of current recommendations for Automatic Data Processing and Longfin, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Automatic Data Processing||0||7||3||0||2.30|
Automatic Data Processing currently has a consensus price target of $173.56, suggesting a potential upside of 5.14%. Given Automatic Data Processing’s higher probable upside, research analysts clearly believe Automatic Data Processing is more favorable than Longfin.
Automatic Data Processing pays an annual dividend of $3.16 per share and has a dividend yield of 1.9%. Longfin does not pay a dividend. Automatic Data Processing pays out 58.0% of its earnings in the form of a dividend. Automatic Data Processing has increased its dividend for 44 consecutive years.
Automatic Data Processing beats Longfin on 9 of the 11 factors compared between the two stocks.
About Automatic Data Processing
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.
Longfin Corp. operates as a finance and technology company in the United States and internationally. The company specializes in structured trade finance solutions and physical commodities finance solutions for finance houses and trading platforms. It offers Blockchain technology solutions for small and medium enterprises, processors, manufacturers, importers, and exporters. Longfin Corp. was incorporated in 2017 and is headquartered in New York, New York.
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