November 21, 2024
Top 10 Stock Automatic Data Processing Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Automatic Data Processing – Top 10 Stock in Diversity Leaders in United States
Automatic Data Processing is listed as a top 10 stock on November 21, 2024 in the market index Diversity USA because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment from a financial fact perspective where only investor sentiment is a reason for caution. Based on the Obermatt 360° View of 37 (37% performer), Obermatt assesses an overall hold recommendation for Automatic Data Processing on November 21, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Data Processing & Outsourcing |
| Index | Dividends USA, Employee Focus US, Diversity USA, NASDAQ 100, NASDAQ, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Automatic Data Processing Hold
| 360 METRICS | November 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 51 |
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| GROWTH | ||||||||
| GROWTH | 53 |
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| SAFETY | ||||||||
| SAFETY | 51 |
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| SENTIMENT | ||||||||
| SENTIMENT | 31 |
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| 360° VIEW | ||||||||
| 360° VIEW | 37 |
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ANALYSIS: With an Obermatt 360° View of 37 (better than 37% compared with alternatives), overall professional sentiment and financial characteristics for the stock Automatic Data Processing are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators above average for Automatic Data Processing. The consolidated Value Rank has an attractive rank of 51, which means that the share price of Automatic Data Processing is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 51% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 53, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. The company is also safely financed with a Safety Rank of 51. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of only 31. Professional investors are more confident in 69% other stocks. ...read more
RECOMMENDATION: With a consolidated 360° View of 37, Automatic Data Processing is worse than 63% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 51), above-average growth (Growth Rank of 53), and safe financing practices (Safety Rank of 51), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the professional market sentiment is on the riskier side (Sentiment Rank of 31), but that could also mean an overreaction to negative news in the past. Good value is sometimes an indication that the company's future is challenging. If they have been enjoying above average growth and are still a good value, this may not continue. We recommend evaluating whether the future of Automatic Data Processing is as challenging as the low price of the stock despite good growth and safe financing practices suggest. Since the professional community is pessimistic, you may want to reflect these negative opinions in light of what you find reasonable to expect for the future. If you believe this pessimistic view is transitory, you have a solid investment case based on current financial factors. ...read more
Sentiment Strategy: Professional Market Sentiment for Automatic Data Processing only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 31 (better than 31% compared with alternatives), overall professional sentiment and engagement for the stock Automatic Data Processing is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Automatic Data Processing. Analyst Opinions are at a rank of 16 (worse than 84% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 10, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 81, which means that professional investors hold more stock in this company than in 81% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 70, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 70% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Automatic Data Processing and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 31 (less encouraging than 69% compared with investment alternatives), Automatic Data Processing has a reputation among professional investors that is below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical, while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Automatic Data Processing Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 51 (better than 51% compared with alternatives), Automatic Data Processing shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Automatic Data Processing. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 99% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 36 which means that the stock price compared with what market professionals expect for future profits is higher than 64% of comparable companies, indicating a low value concerning Automatic Data Processing's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 38 which means that the stock price compared with what market professionals expect for future profit levels is higher than 62% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 7 is also low. Compared with invested capital, the stock price is higher than for 93% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 51, is a buy recommendation based on Automatic Data Processing's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Automatic Data Processing? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Automatic Data Processing only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Automatic Data Processing Growth Momentum good
| GROWTH METRICS | November 21, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 31 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 35 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 46 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 79 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 53 |
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ANALYSIS: With an Obermatt Growth Rank of 53 (better than 53% compared with alternatives), Automatic Data Processing shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Automatic Data Processing. Sales Growth has a below market rank of 31, which means that, currently, professionals expect the company to grow less than 69% of its competitors. The same is valid for Capital Growth, with a rank of 46, and Profit Growth, with a rank of 35. Currently, professionals expect the company to grow its profits less than 65% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 79, which means that the stock returns have recently been above 79% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 53, is a buy recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Automatic Data Processing, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: Automatic Data Processing Debt Financing Safety above-average
| SAFETY METRICS | November 21, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 43 |
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| REFINANCING | ||||||||
| REFINANCING | 20 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 84 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 51 |
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ANALYSIS: With an Obermatt Safety Rank of 51 (better than 51% compared with alternatives), the company Automatic Data Processing has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Automatic Data Processing is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Automatic Data Processing. Liquidity is at 84, meaning the company generates more profit to service its debt than 84% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 20, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 80% of its competitors. Leverage is also high at a rank of 43, which means that the company has an above-average debt-to-equity ratio. It has more debt than 57% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 51 (better than 51% compared with alternatives), Automatic Data Processing has a financing structure that is safer than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Automatic Data Processing Below-Average Financial Performance
| COMBINED PERFORMANCE | November 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 51 |
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| GROWTH | ||||||||
| GROWTH | 53 |
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| SAFETY | ||||||||
| SAFETY | 84 |
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| COMBINED | ||||||||
| COMBINED | 46 |
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ANALYSIS: With an Obermatt Combined Rank of 46 (worse than 54% compared with investment alternatives), Automatic Data Processing (Data Processing & Outsourcing, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Automatic Data Processing are a good value (attractively priced) with a consolidated Value Rank of 51 (better than 51% of alternatives), show above-average growth (Growth Rank of 53), and are safely financed (Safety Rank of 51), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 46, is a hold recommendation based on Automatic Data Processing's financial characteristics. As the company Automatic Data Processing's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 51), above-average growth (Obermatt Growth Rank of 53), and indicate that the company is safely financed (Obermatt Safety Rank of 51), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Automatic Data Processing. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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