Is Automatic Data Processing (ADP) outperforming other business services stocks this year?
Jhe corporate services group has many attractive stocks, but investors should always look for companies that are outperforming their peers. Automatic Data Processing (ADP) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the wider industry? Looking at the stock’s year-to-date performance against its business services peers, we might be able to answer that question.
Automatic data processing is part of the business services sector. This group consists of 277 individual stocks and currently holds a Zacks Sector Rank of #6. The Zacks Sector Ranking includes 16 different groups and is ranked from best to worst in terms of the average Zacks Ranking of individual companies in each of these sectors.
The Zacks ranking emphasizes earnings estimates and estimate revisions to find stocks with improved earnings prospects. This system has a long history of success, and these stocks tend to beat the market over the next one to three months. Automatic Data Processing currently sports a Zacks ranking of #2 (buy).
The Zacks consensus estimate for ADP’s annual earnings rose 2.1% in the last quarter. This is a sign of improving analyst sentiment and a positive trend in the earnings outlook.
Based on the latest available data, ADP has gained around 37.3% so far this year. In comparison, business services companies achieved an average return of -24.3%. This means that automatic data processing has outperformed its sector in terms of year-to-date returns.
BGSF (BGSF) is another business services stock that has outperformed the sector so far this year. Since the start of the year, the stock has risen 3.9%.
For BGSF, the current year EPS consensus estimate rose 0.8% over the past three months. The stock currently has a Zacks rank #2 (buy).
To break it down further, automatic data processing belongs to the outsourcing industry, a group that includes 13 individual companies and is currently ranked 81st in the Zacks Industry Rank. On average, this group has gained an average of 35.2% so far this year, meaning ADP is doing better in terms of returns year-to-date.
On the other hand, BGSF falls under the Business – Services segment. Currently, this industry has 29 stocks and ranks 98th. Since the beginning of the year, the industry has moved by +105.7%.
Investors interested in the business services sector may want to keep a close eye on automatic data processing and BGSF as they attempt to continue their strong performance.
The infrastructure stock boom will sweep America
A massive push to rebuild America’s crumbling infrastructure will soon be underway. It is bipartisan, urgent and inevitable. Billions will be spent. Fortunes will be made.
The only question is “Are you going to get into good stocks early when their growth potential is greatest?”
Zacks released a special report to help you do just that, and today it’s free. Discover 5 special companies looking to make the most of building and repairing roads, bridges and buildings, as well as transporting goods and transforming energy on an almost unimaginable scale.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.