Head-To-Head Survey: BILL (NYSE:BILL) and Automatic Data Processing (NASDAQ:ADP)

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

Volatility & Risk

BILL has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500. Comparatively, Automatic Data Processing has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
BILL	0.01%	2.40%	0.91%
Automatic Data Processing	20.12%	68.82%	6.78%

Valuation & Earnings

This table compares BILL 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
BILL	$1.46 billion	2.62	$23.80 million	($0.01)	-3,854.30
Automatic Data Processing	$20.56 billion	4.33	$4.08 billion	$10.72	20.80

Automatic Data Processing has higher revenue and earnings than BILL. BILL 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 breakdown of recent ratings for BILL and Automatic Data Processing, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BILL	1	9	12	1	2.57
Automatic Data Processing	1	11	3	1	2.25

BILL presently has a consensus target price of $56.85, indicating a potential upside of 47.50%. Automatic Data Processing has a consensus target price of $253.50, indicating a potential upside of 13.71%. Given BILL’s stronger consensus rating and higher possible upside, research analysts plainly believe BILL is more favorable than Automatic Data Processing.

Insider & Institutional Ownership

98.0% of BILL shares are held by institutional investors. Comparatively, 80.0% of Automatic Data Processing shares are held by institutional investors. 13.2% of BILL shares are held by insiders. Comparatively, 0.2% of Automatic Data Processing shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Automatic Data Processing beats BILL on 8 of the 14 factors compared between the two stocks.

About BILL

BILL Holdings, Inc. provides financial automation software for small and midsize businesses worldwide. The company provides software-as-a-service, cloud-based payments, and spend management products, which allow users to automate accounts payable and accounts receivable transactions, as well as enable users to connect with their suppliers and/or customers to do business, eliminate expense reports, manage cash flows, and improve office efficiency. It also offers onboarding implementation support, and ongoing support and training services. In addition, the company's artificial intelligence enabled software provides connections between suppliers and clients. It serves accounting firms, financial institutions, and software companies. The company was formerly known as Bill.com Holdings, Inc. and changed its name to BILL Holdings, Inc. in February 2023. BILL Holdings, Inc. was incorporated in 2006 and is headquartered in San Jose, California.

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.