Automatic Data Processing (NASDAQ:ADP – Get Free Report) and Kforce (NASDAQ:KFRC – Get Free Report) are both industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, risk, valuation and profitability.
Profitability
This table compares Automatic Data Processing and Kforce’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Automatic Data Processing | 20.11% | 71.34% | 6.73% |
| Kforce | 3.59% | 30.34% | 13.76% |
Analyst Ratings
This is a breakdown of current recommendations for Automatic Data Processing and Kforce, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Automatic Data Processing | 1 | 8 | 3 | 0 | 2.17 |
| Kforce | 0 | 3 | 2 | 0 | 2.40 |
Dividends
Automatic Data Processing pays an annual dividend of $6.80 per share and has a dividend yield of 2.5%. Kforce pays an annual dividend of $1.60 per share and has a dividend yield of 3.1%. Automatic Data Processing pays out 62.2% of its earnings in the form of a dividend. Kforce pays out 75.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Automatic Data Processing has raised its dividend for 49 consecutive years.
Valuation and Earnings
This table compares Automatic Data Processing and Kforce”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 | $21.95 billion | 4.89 | $4.41 billion | $10.94 | 24.76 |
| Kforce | $1.34 billion | 0.68 | $50.41 million | $2.12 | 24.18 |
Automatic Data Processing has higher revenue and earnings than Kforce. Kforce 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.
Volatility and Risk
Automatic Data Processing has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500. Comparatively, Kforce has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500.
Insider and Institutional Ownership
80.0% of Automatic Data Processing shares are held by institutional investors. Comparatively, 92.8% of Kforce shares are held by institutional investors. 0.2% of Automatic Data Processing shares are held by insiders. Comparatively, 7.3% of Kforce shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Summary
Automatic Data Processing beats Kforce on 10 of the 17 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 Kforce
Kforce Inc. provides professional staffing services and solutions in the United States. It operates through two segments, Technology, and Finance and Accounting (FA). The Technology segment provides talent solutions to its clients primarily in the areas of information technology, such as systems/applications architecture and development, data management and analytics, business and artificial intelligence, machine learning, project and program management, and network architecture and security. This segment serves clients in various industries comprising financial and business services, communications, insurance, retail, and technology industries. The FA businesses segment offers talent solutions to its clients in areas, including financial planning and analysis, business intelligence analysis, general accounting, transactional accounting, business and cost analysis, and taxation and treasury. It also provides consultants in lower skilled areas comprising loan servicing and support, customer and call center support, data entry, and other administrative roles. This segment serves clients in various industries, including financial and business services, healthcare, and manufacturing sectors. The company was founded in 1962 and is headquartered in Tampa, Florida.
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