Automatic Data Processing, Inc. (ADP) vs ServiceNow, Inc. (NOW)

Automatic Data Processing, Inc. and ServiceNow, Inc. are both Software Application companies. ServiceNow, Inc. is the larger, with a market value of $142.1B against $104.2B — 1.4× the size. Automatic Data Processing, Inc. trades at the lower P/E: 24.0× against 84.0×. ServiceNow, Inc. grew revenue faster over the last twelve months: 22.2% against 6.74%. Automatic Data Processing, Inc. has the higher net margin (20.1% vs 11.3%) and the higher return on invested capital (53.4% vs 6.83%). Across the 22 metrics below, Automatic Data Processing, Inc. leads on 13 and ServiceNow, Inc. on 9.

Valuation

Metric ADP NOW Software Application median
P/E 24.04 84.03 24.79
P/S 4.83 9.49 2.67
P/B 17.59 11.18 3.01
Price to free cash flow 22.21 30.83 16.59
EV/EBITDA 14.42 41.74 14.40
EV/Sales 4.91 9.69 2.62
Earnings yield 4.16% 1.19% 0.00%
Free cash flow yield 4.50% 3.24% 1.91%

Profitability

Metric ADP NOW Software Application median
Gross margin 46.42% 74.77% 67.03%
Operating margin 26.33% 11.40% 0.00%
Net margin 20.11% 11.34% 0.00%
Free cash flow margin 21.76% 31.09% 4.32%
Return on equity 72.24% 14.24% 0.00%
Return on assets 7.57% 6.22% 0.00%
Return on invested capital 53.39% 6.83% 0.00%

Growth

Metric ADP NOW Software Application median
Revenue growth (TTM) 6.74% 22.19% 12.40%
EPS growth (last fiscal year) 9.62% 22.08% —
Revenue growth, 5-year CAGR 7.90% 24.06% 13.72%
Net income growth, 5-year CAGR 11.18% 71.16% 0.00%

Health

Metric ADP NOW Software Application median
Debt to equity 0.82 0.60 0.02
Current ratio 1.05 0.70 1.55
Net debt to EBITDA 0.10 (1.51) 0.06

Dividend

Metric ADP NOW Software Application median
Dividend yield 1.96% — 1.25%
Payout ratio 0.58 0.00 0.00

Size

Metric ADP NOW Software Application median
Market cap 104.23b 142.09b 396.11m

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