Automatic Data Processing (NASDAQ:ADP) and Globant (NYSE:GLOB) are both business services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.
Automatic Data Processing pays an annual dividend of $2.76 per share and has a dividend yield of 1.8%. Globant does not pay a dividend. Automatic Data Processing pays out 63.4% of its earnings in the form of a dividend. Automatic Data Processing has raised its dividend for 43 consecutive years.
This is a breakdown of recent ratings and target prices for Automatic Data Processing and Globant, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Automatic Data Processing||0||8||9||0||2.53|
Automatic Data Processing presently has a consensus target price of $144.00, suggesting a potential downside of 4.63%. Globant has a consensus target price of $56.86, suggesting a potential upside of 1.88%. Given Globant’s stronger consensus rating and higher probable upside, analysts clearly believe Globant is more favorable than Automatic Data Processing.
Risk and Volatility
Automatic Data Processing has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500. Comparatively, Globant has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500.
Institutional and Insider Ownership
77.7% of Automatic Data Processing shares are owned by institutional investors. Comparatively, 79.5% of Globant shares are owned by institutional investors. 0.3% of Automatic Data Processing shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This table compares Automatic Data Processing and Globant’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Automatic Data Processing||12.16%||50.17%||4.78%|
Earnings and Valuation
This table compares Automatic Data Processing and Globant’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||$13.33 billion||4.96||$1.62 billion||$4.35||34.71|
|Globant||$413.44 million||4.84||$30.53 million||$0.88||63.42|
Automatic Data Processing has higher revenue and earnings than Globant. Automatic Data Processing is trading at a lower price-to-earnings ratio than Globant, indicating that it is currently the more affordable of the two stocks.
Automatic Data Processing beats Globant on 11 of the 17 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.
Globant S.A., a technology services company, provides services related to application development, testing, infrastructure management, and application maintenance worldwide. The company offers machine learning, pattern recognition, natural language understanding, future of organizations, customer insight, behavioral change, product innovation, design thinking, product management discovery and delivery, and product coaching services. It also provides process appraisal, automated, process evolution, delivery management, agile consultancy, management consulting, user experience, visual and service, industrial design, mobile engineering, fast prototyping, and mobile and product strategy services. In addition, the company offers game engineering and experience, digital platform, virtual and augmented reality, graphics engineering, 3D and 2D art, e-Sports, data architecture, data science, distributed platform, data integration, data visualization, and blockchain services. Further, it provides Internet of things experience and consultancy, platform, hardware integration, content management system, e-learning, video content production, OTT, and Cloud Ops Studio services. Additionally, the company offers functional testing, load and performance testing, mobile testing, test automation, large scale Web applications, hybrid and cross-compiled development, accessibility, API management, micro, complex architecture, software archaeology, IT service management, and software evolution services, as well as services over platforms. It serves medium- to large-sized companies operating in media and entertainment, professional services, technology and telecommunications, travel and hospitality, banks, financial services and insurance, and consumer, and retail and manufacturing industries. The company was formerly known as IT Outsourcing S.L. and changed its name to Globant S.A. in December 2012. Globant S.A. was founded in 2003 and is based in Luxembourg City, Luxembourg.
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