TrueBlue (NYSE:TBI – Get Free Report) and Automatic Data Processing (NASDAQ:ADP – Get Free Report) are both industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, profitability, valuation, dividends and risk.
Risk and Volatility
TrueBlue has a beta of 1.74, suggesting that its share price is 74% more volatile than the S&P 500. Comparatively, Automatic Data Processing has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500.
Valuation & Earnings
This table compares TrueBlue and Automatic Data Processing”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| TrueBlue | $1.69 billion | 0.18 | -$47.96 million | ($1.88) | -5.25 |
| Automatic Data Processing | $21.95 billion | 5.39 | $4.41 billion | $11.28 | 26.49 |
Automatic Data Processing has higher revenue and earnings than TrueBlue. TrueBlue 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.
Profitability
This table compares TrueBlue and Automatic Data Processing’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| TrueBlue | -3.35% | -6.26% | -2.65% |
| Automatic Data Processing | 20.33% | 77.01% | 6.67% |
Analyst Recommendations
This is a summary of current ratings and target prices for TrueBlue and Automatic Data Processing, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| TrueBlue | 1 | 1 | 1 | 0 | 2.00 |
| Automatic Data Processing | 2 | 9 | 3 | 0 | 2.07 |
TrueBlue currently has a consensus target price of $7.75, suggesting a potential downside of 21.49%. Automatic Data Processing has a consensus target price of $285.00, suggesting a potential downside of 4.61%. Given Automatic Data Processing’s stronger consensus rating and higher possible upside, analysts clearly believe Automatic Data Processing is more favorable than TrueBlue.
Insider and Institutional Ownership
97.2% of TrueBlue shares are held by institutional investors. Comparatively, 80.0% of Automatic Data Processing shares are held by institutional investors. 8.0% of TrueBlue shares are held by insiders. Comparatively, 0.2% of Automatic Data Processing shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Summary
Automatic Data Processing beats TrueBlue on 11 of the 14 factors compared between the two stocks.
About TrueBlue
TrueBlue, Inc., together with its subsidiaries, provides specialized workforce solutions in the United States, Canada, the United Kingdom, Australia, and Puerto Rico. It operates through three segments: PeopleReady, PeopleManagement, and PeopleScout. The company PeopleReady segment provides general, industrial, and skilled trade contingent staffing services for construction, transportation, manufacturing, retail, hospitality, and renewable energy industries. The PeopleManagement segment offers contingent, on-site industrial staffing, and commercial driver services, which includes on-site management and recruitment for the contingent industrial workforce of manufacturing, warehousing, and distribution facilities; and recruitment and management of contingent and dedicated commercial drivers to the transportation and distribution industries under the Staff Management, SIMOS Insourcing Solutions, and Centerline Drivers brands. The company PeopleScout segment provides recruitment process outsourcing, talent advisory services, and managed service provider solutions including sourcing, screening, hiring, and onboarding services; operates Affinix, a technology platform for sourcing, screening, and delivering a permanent workforce to its clients; talent advisory services, such as employer branding, recruitment marketing, talent insights, diversity, equity and inclusion consulting, candidate assessment, and talent acquisition strategy consulting services; and contingent labor programs including vendor selection, performance management, compliance monitoring, and risk management. TrueBlue, Inc. was formerly known as Labor Ready, Inc. and changed its name to TrueBlue, Inc. in December 2007. The company was incorporated in 1985 and is headquartered in Tacoma, Washington.
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.
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