Automatic Data Processing (NASDAQ:ADP) and Brightcove (NASDAQ:BCOV) are both business services companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, profitability, institutional ownership, valuation, risk and dividends.
Insider and Institutional Ownership
81.2% of Automatic Data Processing shares are held by institutional investors. Comparatively, 76.7% of Brightcove shares are held by institutional investors. 0.3% of Automatic Data Processing shares are held by company insiders. Comparatively, 1.9% of Brightcove shares are held by company 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.
This is a breakdown of recent recommendations and price targets for Automatic Data Processing and Brightcove, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Automatic Data Processing||0||8||6||0||2.43|
Automatic Data Processing currently has a consensus price target of $157.42, suggesting a potential downside of 2.72%. Brightcove has a consensus price target of $13.20, suggesting a potential upside of 29.29%. Given Brightcove’s stronger consensus rating and higher probable upside, analysts plainly believe Brightcove is more favorable than Automatic Data Processing.
Automatic Data Processing pays an annual dividend of $3.16 per share and has a dividend yield of 2.0%. Brightcove does not pay a dividend. Automatic Data Processing pays out 72.6% of its earnings in the form of a dividend. Automatic Data Processing has increased its dividend for 44 consecutive years.
Risk and Volatility
Automatic Data Processing has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500. Comparatively, Brightcove has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500.
Valuation & Earnings
This table compares Automatic Data Processing and Brightcove’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Automatic Data Processing||$13.33 billion||5.28||$1.62 billion||$4.35||37.20|
|Brightcove||$164.83 million||2.34||-$14.03 million||($0.27)||-37.81|
Automatic Data Processing has higher revenue and earnings than Brightcove. Brightcove 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.
This table compares Automatic Data Processing and Brightcove’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Automatic Data Processing||13.76%||50.53%||5.68%|
Automatic Data Processing beats Brightcove on 12 of the 17 factors compared between the two stocks.
Automatic Data Processing Company Profile
Automatic Data Processing, Inc. provides business process outsourcing services worldwide. It operates through two segments, Employer Services and Professional Employer Organization (PEO) Services. The Employer Services segment offers various human resources (HR) outsourcing and technology-based human capital management solutions. Its offerings include payroll, benefits administration, talent management, HR management, time and attendance management, insurance, retirement, and compliance services. This segment provides a range of solutions, which businesses of various types and sizes can use to activate talent, as well as recruit, pay, manage, and retain their workforce. It serves approximately 630,000 clients through its cloud-based strategic software as a service offering. The PEO Services segment provides HR outsourcing solutions through a co-employment model. This segment offers HR administration services, including employee recruitment, payroll and tax administration, time and attendance management, benefits administration, employee training and development, online HR management tools, and employee leave administration. It also provides employee benefits that enable eligible worksite employees with access to a 401(k) retirement savings plan, health savings accounts, flexible spending accounts, group term life and disability coverage, and an employee assistance program, as well as group health, dental, and vision coverage. In addition, this segment offers employer liability management services comprising workers' compensation program, unemployment claims management, safety compliance guidance and access to safety training, access to employment practices liability insurance, and guidance on compliance with the United States federal, state, and local employment laws and regulations. The company was founded in 1949 and is headquartered in Roseland, New Jersey.
Brightcove Company Profile
Brightcove Inc. provides cloud-based services for video. It offers Video Cloud, an online video platform that enables its customers to publish and distribute video to Internet-connected devices. The company also provides Zencoder, a cloud-based video encoding service for file support, quality and control, speed and reliability, platform and security, and account and integration; SSAI, a cloud-based ad insertion and video stitching service; and Player, a cloud-based service for creating and managing video player experiences. In addition, it offers Video Marketing Suite, a suite of video technologies to address the needs of marketers to drive awareness, engagement, and conversion; OTT Flow, a service for media companies and content owners to deploy direct-to-consumer, live and on-demand video services across platforms; and Enterprise video suite, an enterprise-class platform for internal communications, employee training, live streaming, marketing, and e-commerce videos. Further, the company provides account management, professional, support, and online and onsite training services. It serves media companies, broadcasters, publishers, sports and entertainment companies, fashion and hospitality brands and corporations, faith-based institutions, e-commerce platforms, and hi-tech organizations; and governments, educational institutions, and non-profit organizations through direct sales, referral partners, channel partners, and resellers in North America, Europe, Japan, the Asia Pacific, and internationally, as well as sells its products online. The company was formerly known as Video Marketplace, Inc. and changed its name to Brightcove Inc. in March 2005. Brightcove Inc. was founded in 2004 and is headquartered in Boston, Massachusetts.
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