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

Insider & Institutional Ownership

77.6% of Automatic Data Processing shares are owned by institutional investors. 0.3% of Automatic Data Processing shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Automatic Data Processing and PagSeguro Digital’s 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 4.95 $1.62 billion $4.35 34.64
PagSeguro Digital $790.32 million 4.47 $149.95 million $0.57 50.32

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

Dividends

Automatic Data Processing pays an annual dividend of $2.76 per share and has a dividend yield of 1.8%. PagSeguro Digital 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.

Analyst Ratings

This is a summary of current ratings and target prices for Automatic Data Processing and PagSeguro Digital, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Automatic Data Processing 0 7 8 0 2.53
PagSeguro Digital 2 1 8 0 2.55

Automatic Data Processing presently has a consensus price target of $140.29, indicating a potential downside of 6.90%. PagSeguro Digital has a consensus price target of $36.09, indicating a potential upside of 25.84%. Given PagSeguro Digital’s stronger consensus rating and higher probable upside, analysts clearly believe PagSeguro Digital is more favorable than Automatic Data Processing.

Profitability

This table compares Automatic Data Processing and PagSeguro Digital’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%
PagSeguro Digital N/A N/A N/A

Summary

Automatic Data Processing beats PagSeguro Digital on 11 of the 15 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.

About PagSeguro Digital

PagSeguro Digital Ltd. provides financial technology solutions and services for micro-merchants, and small and medium-sized businesses in Brazil and internationally. The company's products and services include PagSeguro Ecosystem, an end-to-end digital ecosystem that operates as a closed loop where its clients are able to address their primary day to day financial needs, including receiving and spending funds, and managing and growing their businesses; and Free PagSeguro digital account, which centralizes various cash-in options, functionalities, services, and cash-out options in a single ecosystem. It also acquires and sells point of sale (POS) devices and other products; and offers online gaming and cross-border digital services. In addition, the company offers functionalities, and value-added services and features, such as purchase protection mechanisms, antifraud platform, account and business management tools, eWallet, and its POS app. Further, it is involved in processing of back-office solutions, including sales reconciliation, and gateway solutions and services, as well as the capture of credit cards with administrators and acquirers. Additionally, the company engages in the in-person payment activities through POS devices; and issuance of prepaid cards to clients for spending or withdrawing account balances. It also provides online gaming and cross-border digital services; and operates an online platform that facilitates peer-to-peer lending. The company was founded in 2006 and is headquartered in São Paulo, Brazil. PagSeguro Digital Ltd. is a subsidiary of Universo Online S.A.

Receive News & Ratings for Automatic Data Processing Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Automatic Data Processing and related companies with MarketBeat.com's FREE daily email newsletter.