ADP Or PAYX: Which Outsourcing Services Firm Is Better Placed?
Zacks Investment Research | May 30, 2019 09:57PM ET
The outsourcing industry includes companies that are engaged in providing information technology, payroll, human resource, retirement and insurance services, business management solutions and business process outsourcing for small and mid-sized companies in the United States and abroad.
Increasing demand for expertise in improving efficiency and reducing costs is currently keeping the industry in good shape. Most of the companies are considering emerging technologies such as cloud computing and robotic process automation (RPA) to drive competitive advantage. This should help increase innovation, improve speed-to-market and drive performance within the industry.
The industry is labor intensive and heavily dependent on foreign talent. So, rising talent costs due to competition coupled with Trump’s stringent policies on immigration weigh on the its growth.
Considering this backdrop, it is not a bad idea to undertake a comparative analysis of two Outsourcing Services stocks— Automatic Data Processing (NASDAQ:ADP) and Paychex, Inc. (NASDAQ:PAYX) . While ADP has a market capitalization of $69.6 billion, the same for Paychex is $30.8 billion.
As the stocks carry a Zacks Rank #3 (Hold), we are using other parameters to provide investors a better insight.
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