Head to Head Survey: Insperity (NYSE:NSP) and Paylocity (NASDAQ:PCTY)

Insperity (NYSE:NSP) and Paylocity (NASDAQ:PCTY) are both industrials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, earnings, risk, dividends, analyst recommendations and profitability.

Volatility and Risk

Insperity has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500. Comparatively, Paylocity has a beta of 0.5, indicating that its share price is 50% less volatile than the S&P 500.

Profitability

This table compares Insperity and Paylocity’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Insperity	-0.23%	-19.99%	-0.60%
Paylocity	15.23%	27.02%	5.78%

Analyst Ratings

This is a summary of recent recommendations for Insperity and Paylocity, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Insperity	2	2	1	0	1.80
Paylocity	0	5	12	0	2.71

Insperity currently has a consensus target price of $53.33, suggesting a potential upside of 5.16%. Paylocity has a consensus target price of $163.76, suggesting a potential downside of 1.49%. Given Insperity’s higher probable upside, equities research analysts clearly believe Insperity is more favorable than Paylocity.

Valuation and Earnings

This table compares Insperity and Paylocity”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Insperity	$6.81 billion	0.28	-$7.00 million	($0.43)	-117.94
Paylocity	$1.77 billion	4.98	$269.74 million	$4.95	33.59

Paylocity has lower revenue, but higher earnings than Insperity. Insperity is trading at a lower price-to-earnings ratio than Paylocity, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

93.4% of Insperity shares are owned by institutional investors. Comparatively, 94.8% of Paylocity shares are owned by institutional investors. 5.8% of Insperity shares are owned by company insiders. Comparatively, 19.4% of Paylocity 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.

Summary

Paylocity beats Insperity on 10 of the 13 factors compared between the two stocks.

About Insperity

Insperity, Inc. engages in the provision of human resources (HR) and business solutions to improve business performance for small and medium-sized businesses primarily in the United States. It offers its HR services through its workforce optimization and workforce synchronization solutions that include a range of human resources functions, such as payroll and employment administration, employee benefits, workers' compensation, government compliance, performance management, and training and development services. The company also provides Insperity Premier, a cloud-based human capital management platform that offers professional employer organization HR outsourcing solutions to its clients; people management services; and employer liability management services, as well as solutions for middle market. In addition, it offers MarketPlace, an e-commerce portal that offers a range of products and services; and Workforce Acceleration, a human capital management and payroll services solution; integrated payroll; benefits administration; HR administration and employee onboarding; time and attendance; performance management; reporting and analytics; recruiting; employment screening; retirement; and insurance services. The company was formerly known as Administaff, Inc. and changed its name to Insperity, Inc. in March 2011. Insperity, Inc. was founded in 1986 and is headquartered in Kingwood, Texas.

About Paylocity

Paylocity Holding Corporation engages in the provision of cloud-based human capital management and payroll software solutions for workforce in the United States. The company offers payroll software solution for global payroll, expense management, tax services, on demand payment, and garnishment managed services; and time and labor management software for time and attendance, scheduling, and time collection. It also provides human resources (HR) software solutions for employee self-service, compliance, HR edge, data analytics, and workflows and documents, as well as human resource management system; talent management system for recruiting, onboarding, performance, compensation, and learning; and benefits administration software. In addition, the company offers employee experience platform for community, employee voice, recognition and rewards, video, and modern workforce index; HR reporting software; and mobile HR solutions. Further, it provides implementation and training, client, and tax and regulatory services. The company serves for-profit and non-profit organizations across industries, including business services, financial services, healthcare, manufacturing, restaurants, retail, technology, and others. It sells its products through sales representatives. The company was founded in 1997 and is headquartered in Schaumburg, Illinois.