Critical Review: Tenable (NASDAQ:TENB) & Automatic Data Processing (NASDAQ:ADP)

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for Tenable and Automatic Data Processing, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tenable	1	10	9	0	2.40
Automatic Data Processing	2	9	2	1	2.14

Tenable currently has a consensus target price of $29.35, suggesting a potential upside of 51.69%. Automatic Data Processing has a consensus target price of $278.62, suggesting a potential upside of 38.98%. Given Tenable’s stronger consensus rating and higher probable upside, research analysts plainly believe Tenable is more favorable than Automatic Data Processing.

Institutional and Insider Ownership

89.1% of Tenable shares are owned by institutional investors. Comparatively, 80.0% of Automatic Data Processing shares are owned by institutional investors. 1.7% of Tenable shares are owned by insiders. Comparatively, 0.2% of Automatic Data Processing shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Tenable 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
Tenable	$999.41 million	2.22	-$36.12 million	($0.30)	-64.50
Automatic Data Processing	$21.21 billion	3.80	$4.08 billion	$10.40	19.28

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

Risk & Volatility

Tenable has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500. Comparatively, Automatic Data Processing has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Tenable	-3.61%	0.20%	0.04%
Automatic Data Processing	19.96%	68.44%	6.83%

Summary

Automatic Data Processing beats Tenable on 10 of the 15 factors compared between the two stocks.

About Tenable

Tenable Holdings, Inc. provides cyber exposure solutions for in the Americas, Europe, the Middle East, Africa, the Asia Pacific, and Japan. Its platforms include Tenable Vulnerability Management, a cloud-delivered software as a service that provides organizations with a risk-based view of traditional and modern attack surfaces; Tenable Cloud Security, a cloud-native cloud security solutions for security teams to continuously assess the security posture; Tenable Identity Exposure, a solution to secure Active Directory environments; Tenable Web App Scanning, which provides scanning for modern web applications; Tenable Lumin Exposure View, a measurement tool; Tenable Attack Surface Management, an external attack surface management solution; Tenable Security Center, an on-premises solution that provides a risk-based view of an organization’s IT, security and compliance posture; and Tenable OT Security, an operational technology security solution which provides threat detection, asset tracking, vulnerability management, and configuration control capabilities. The company also offers Nessus, a vulnerability assessment solution for cybersecurity industry and enterprise platform; and Nessus Expert, that enables users to programmatically detect cloud infrastructure misconfigurations and vulnerabilities in the design and build phase. Tenable Holdings, Inc. was founded in 2002 and is headquartered in Columbia, Maryland.

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.