Financial Comparison: Automatic Data Processing (NASDAQ:ADP) & TrueBlue (NYSE:TBI)

Automatic Data Processing (NASDAQ:ADP) and TrueBlue (NYSE:TBI) are both industrials companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, earnings, analyst recommendations, risk, profitability, valuation and institutional ownership.

Risk and Volatility

Automatic Data Processing has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500. Comparatively, TrueBlue has a beta of 1.74, suggesting that its stock price is 74% more volatile than the S&P 500.

Institutional & Insider Ownership

80.0% of Automatic Data Processing shares are owned by institutional investors. Comparatively, 97.2% of TrueBlue shares are owned by institutional investors. 0.2% of Automatic Data Processing shares are owned by insiders. Comparatively, 8.0% of TrueBlue shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Automatic Data Processing and TrueBlue”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Automatic Data Processing	$22.26 billion	5.42	$4.41 billion	$11.28	27.08
TrueBlue	$1.62 billion	0.23	-$47.96 million	($1.88)	-6.37

Automatic Data Processing has higher revenue and earnings than TrueBlue. TrueBlue is trading at a lower price-to-earnings ratio than Automatic Data Processing, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Automatic Data Processing and TrueBlue, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Automatic Data Processing	2	9	3	0	2.07
TrueBlue	1	1	0	0	1.50

Automatic Data Processing presently has a consensus target price of $285.00, suggesting a potential downside of 6.71%. TrueBlue has a consensus target price of $9.50, suggesting a potential downside of 20.67%. Given Automatic Data Processing’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Automatic Data Processing is more favorable than TrueBlue.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Automatic Data Processing	20.33%	77.01%	6.67%
TrueBlue	-3.35%	-6.26%	-2.65%

Summary

Automatic Data Processing beats TrueBlue on 11 of the 14 factors compared between the two stocks.

About Automatic Data Processing

Automatic Data Processing, Inc. provides cloud-based human capital management solutions worldwide. It operates in two segments, Employer Services and Professional Employer Organization (PEO). The Employer Services segment offers strategic, cloud-based platforms, and human resources (HR) outsourcing solutions. Its offerings include payroll services, benefits administration, talent management, HR management, workforce management, insurance, retirement, and compliance services, as well as integrated HCM solutions. The PEO Services segment provides HR outsourcing solution to businesses through a co-employment model. This segment offers employee benefits, protection and compliance, talent engagement, expertise, comprehensive outsourcing, and recruitment process outsourcing services. Automatic Data Processing, Inc. was founded in 1949 and is headquartered in Roseland, New Jersey.

About TrueBlue

TrueBlue, Inc., together with its subsidiaries, provides specialized workforce solutions in the United States, Canada, the United Kingdom, Australia, and Puerto Rico. It operates through three segments: PeopleReady, PeopleManagement, and PeopleScout. The company PeopleReady segment provides general, industrial, and skilled trade contingent staffing services for construction, transportation, manufacturing, retail, hospitality, and renewable energy industries. The PeopleManagement segment offers contingent, on-site industrial staffing, and commercial driver services, which includes on-site management and recruitment for the contingent industrial workforce of manufacturing, warehousing, and distribution facilities; and recruitment and management of contingent and dedicated commercial drivers to the transportation and distribution industries under the Staff Management, SIMOS Insourcing Solutions, and Centerline Drivers brands. The company PeopleScout segment provides recruitment process outsourcing, talent advisory services, and managed service provider solutions including sourcing, screening, hiring, and onboarding services; operates Affinix, a technology platform for sourcing, screening, and delivering a permanent workforce to its clients; talent advisory services, such as employer branding, recruitment marketing, talent insights, diversity, equity and inclusion consulting, candidate assessment, and talent acquisition strategy consulting services; and contingent labor programs including vendor selection, performance management, compliance monitoring, and risk management. TrueBlue, Inc. was formerly known as Labor Ready, Inc. and changed its name to TrueBlue, Inc. in December 2007. The company was incorporated in 1985 and is headquartered in Tacoma, Washington.