IBEX (NASDAQ:IBEX) versus Automatic Data Processing (NASDAQ:ADP) Financial Analysis

IBEX (NASDAQ:IBEX) and Automatic Data Processing (NASDAQ:ADP) are both business services companies, but which is the better stock? We will compare the two companies based on the strength of their risk, institutional ownership, analyst recommendations, earnings, dividends, valuation and profitability.

Profitability

This table compares IBEX and Automatic Data Processing’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
IBEX	6.62%	22.04%	11.93%
Automatic Data Processing	19.54%	89.20%	6.73%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for IBEX and Automatic Data Processing, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
IBEX	0	2	2	0	2.50
Automatic Data Processing	2	9	2	0	2.00

IBEX currently has a consensus price target of $20.50, suggesting a potential upside of 6.27%. Automatic Data Processing has a consensus price target of $267.83, suggesting a potential downside of 6.08%. Given IBEX’s stronger consensus rating and higher probable upside, equities research analysts clearly believe IBEX is more favorable than Automatic Data Processing.

Insider & Institutional Ownership

81.2% of IBEX shares are owned by institutional investors. Comparatively, 80.0% of Automatic Data Processing shares are owned by institutional investors. 20.8% of IBEX shares are owned by company insiders. Comparatively, 0.3% of Automatic Data Processing shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

IBEX has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500. Comparatively, Automatic Data Processing has a beta of 0.79, suggesting that its share price is 21% less volatile than the S&P 500.

Valuation & Earnings

This table compares IBEX and Automatic Data Processing”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
IBEX	$508.57 million	0.65	$33.65 million	$1.53	12.61
Automatic Data Processing	$19.20 billion	6.08	$3.75 billion	$8.96	31.83

Automatic Data Processing has higher revenue and earnings than IBEX. IBEX 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.

Summary

Automatic Data Processing beats IBEX on 8 of the 13 factors compared between the two stocks.

About IBEX

IBEX Limited provides end-to-end technology-enabled customer lifecycle experience solutions in the United States and internationally. The company products and services portfolio includes ibex Connect, that offers customer service, technical support, revenue generation, and other revenue generation outsourced back-office services through the CX model, which integrates voice, email, chat, SMS, social media, and other communication applications; ibex Digital, a customer acquisition solution that comprises digital marketing, e-commerce technology, and platform solutions; and ibex CX, a customer experience solution, which provides a suite of proprietary software tools to measure, monitor, and manage its clients' customer experience. It operates customer engagement and customer acquisition delivery centers. The company serves banking and financial services, delivery and logistics, health tech and wellness, high tech, retail and e-commerce, streaming and entertainment, travel and hospitality, and utility industries. The company was formerly known as IBEX Holdings Limited and changed its name to IBEX Limited in September 2019. IBEX Limited was incorporated in 2017 and is headquartered in Washington, District of Columbia. The company is a subsidiary of The Resource Group International Limited.

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.