Financial Analysis: Paychex (NASDAQ:PAYX) & RPS Group (OTCMKTS:RPSGF)

RPS Group (OTCMKTS:RPSGF) and Paychex (NASDAQ:PAYX) are both industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, earnings, profitability, risk and valuation.

Institutional and Insider Ownership

83.5% of Paychex shares are held by institutional investors. 0.8% of Paychex shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings for RPS Group and Paychex, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RPS Group	0	0	0	0	0.00
Paychex	4	10	2	1	2.00

Paychex has a consensus price target of $109.20, indicating a potential downside of 10.51%. Given Paychex’s stronger consensus rating and higher probable upside, analysts plainly believe Paychex is more favorable than RPS Group.

Earnings and Valuation

This table compares RPS Group and Paychex”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RPS Group	N/A	N/A	N/A	N/A	N/A
Paychex	$6.51 billion	6.66	$1.76 billion	$4.89	24.95

Paychex has higher revenue and earnings than RPS Group.

Profitability

This table compares RPS Group and Paychex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RPS Group	N/A	N/A	N/A
Paychex	27.03%	50.90%	11.87%

Summary

Paychex beats RPS Group on 10 of the 10 factors compared between the two stocks.

About RPS Group

RPS Group Plc engages in the provision of environmental consultancy services for the infrastructure, urban growth, energy, mining, and natural resource management. It operates through the following segments: Energy, Consulting-UK and Ireland, Services-UK and Netherlands, Norway, North America and Australia Asia Pacific. The company was founded in 1970 and is headquartered in Abingdon, the United Kingdom.

About Paychex

Paychex, Inc., together with its subsidiaries, provides integrated human capital management solutions (HCM) for payroll, benefits, human resources (HR), and insurance services for small to medium-sized businesses in the United States, Europe, and India. It offers payroll processing services; payroll tax administration services; employee payment services; and regulatory compliance services, such as new-hire reporting and garnishment processing. The company also provides HR solutions, including integrated HCM technology solutions and HR advisory services through both virtual and on-site availability of a professionally trained HR representative, as well as HR support to non-payroll clients through its HR Partner Plus solution; and retirement services administration, such as plan implementation, ongoing compliance with government regulations, employee and employer reporting, participant and employer online access, electronic funds transfer, and other administrative services. In addition, it offers cloud-based HR administration software products for employee benefits management and administration, time and attendance, digital communication solutions, recruiting, and onboarding solutions; plan administration outsourcing and state unemployment insurance services; various business services to small to medium-sized businesses comprising payroll funding and outsourcing services, which include payroll processing, invoicing, and tax preparation; and payment processing services, financial fitness programs, and a small-business loan resource center. Further, the company provides insurance services for property and casualty coverage, such as workers’ compensation, business-owner policies, cyber security protection, and commercial auto, as well as health and benefits coverage, including health, dental, vision, and life. It markets and sells its services primarily through its direct sales force. The company was founded in 1971 and is headquartered in Rochester, New York.