Critical Analysis: TriNet Group (NYSE:TNET) and Adecco (OTCMKTS:AHEXY)

TriNet Group (NYSE:TNET) and Adecco (OTCMKTS:AHEXY) are both mid-cap industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, risk, dividends and valuation.

Valuation & Earnings

This table compares TriNet Group and Adecco”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TriNet Group	$5.01 billion	0.59	$155.00 million	$3.69	17.59
Adecco	$26.11 billion	0.18	$333.76 million	$1.01	13.48

Adecco has higher revenue and earnings than TriNet Group. Adecco is trading at a lower price-to-earnings ratio than TriNet Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings for TriNet Group and Adecco, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TriNet Group	1	5	1	0	2.00
Adecco	2	4	1	1	2.12

TriNet Group currently has a consensus price target of $60.83, indicating a potential downside of 6.28%. Given TriNet Group’s higher possible upside, equities analysts plainly believe TriNet Group is more favorable than Adecco.

Insider & Institutional Ownership

96.8% of TriNet Group shares are held by institutional investors. 40.0% of TriNet Group shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares TriNet Group and Adecco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TriNet Group	3.56%	202.90%	5.74%
Adecco	1.25%	12.67%	3.62%

Dividends

TriNet Group pays an annual dividend of $1.16 per share and has a dividend yield of 1.8%. Adecco pays an annual dividend of $0.33 per share and has a dividend yield of 2.4%. TriNet Group pays out 31.4% of its earnings in the form of a dividend. Adecco pays out 32.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. TriNet Group has raised its dividend for 1 consecutive years.

Volatility and Risk

TriNet Group has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500. Comparatively, Adecco has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500.

Summary

TriNet Group beats Adecco on 12 of the 17 factors compared between the two stocks.

About TriNet Group

TriNet Group, Inc. provides comprehensive and flexible human capital management services for small and medium size businesses in the United States. The company offers multi-state payroll processing and tax administration; employee benefits programs, including health insurance and retirement plans; workers compensation insurance and claims management; employment and benefits law compliance; and other HR related services. It also provides technology platform, an online and mobile tool that allows users to store, view, and manager HR information and administer various HR transactions, such as payroll processing, tax administration and credits, employee onboarding and termination, employee performance, time and attendance, compensation reporting, expense management, and benefits enrollment and administration, as well as incorporated workforce analytics and allows professional employer organization clients to generate HR data, payroll, compensation, and other custom reports. The company serves clients in various industries, including technology, professional services, financial services, life sciences, and not-for-profit. It sells its solutions through its direct sales organization. TriNet Group, Inc. was incorporated in 1988 and is headquartered in Dublin, California.

About Adecco

Adecco Group AG, together with its subsidiaries, provides human resource services to businesses and organizations in Europe, North America, Asia Pacific, South America, and North Africa. It offers flexible placement, permanent placement, outsourcing, training, upskilling and reskilling, career transition and workforce transformation, consulting, talent academy, digital staffing solutions under the Adecco, Akkodis, General Assembly, Badenoch + Clark, Lee Hecht Harrison, pontoon, Spring Professional, Adia, Modis, and YOSS brand names. The company also operates Hired, a talent recruitment platform. The company was formerly known as Adecco S.A. Adecco Group AG was founded in 1957 and is based in Zurich, Switzerland.