Yext (YEXT) vs. Automatic Data Processing (ADP) Financial Survey

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

Dividends

Automatic Data Processing pays an annual dividend of $2.76 per share and has a dividend yield of 1.9%. Yext 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 increased its dividend for 43 consecutive years.

Risk & Volatility

Yext has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, Automatic Data Processing has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Yext and Automatic Data Processing, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Yext 0 2 3 0 2.60
Automatic Data Processing 0 7 8 0 2.53

Yext currently has a consensus target price of $19.00, indicating a potential downside of 29.24%. Automatic Data Processing has a consensus target price of $140.29, indicating a potential downside of 4.39%. Given Automatic Data Processing’s higher possible upside, analysts plainly believe Automatic Data Processing is more favorable than Yext.

Insider & Institutional Ownership

53.6% of Yext shares are owned by institutional investors. Comparatively, 79.0% of Automatic Data Processing shares are owned by institutional investors. 20.8% of Yext shares are owned by company insiders. Comparatively, 0.3% of Automatic Data Processing shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Yext and Automatic Data Processing’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Yext $170.20 million 15.55 -$66.56 million ($0.85) -31.59
Automatic Data Processing $13.33 billion 4.82 $1.62 billion $4.35 33.73

Automatic Data Processing has higher revenue and earnings than Yext. Yext 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.

Profitability

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

Net Margins Return on Equity Return on Assets
Yext -36.92% -91.20% -38.50%
Automatic Data Processing 12.16% 50.17% 4.78%

Summary

Automatic Data Processing beats Yext on 13 of the 17 factors compared between the two stocks.

Yext Company Profile

Yext, Inc. provides a knowledge engine platform that lets businesses manage their digital knowledge in the cloud in North America and Europe. The company offers Yext Knowledge Engine, a cloud-based global platform that enables businesses to control and manage their digital knowledge and make it available through its PowerListings Network of approximately 150 third-party maps, apps, search engines, intelligent GPS systems, digital assistants, vertical directories, and social networks. Yext, Inc. serves healthcare, retail, and financial services industries. The company was founded in 2006 and is based in New York, New York.

Automatic Data Processing Company Profile

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.

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