Paychex or Automatic Data Processing: Which Stock Has More Upside?
Automatic Data Processing fell -5.0% during the past day. You may be tempted to buy more or may want to reduce your exposure. But there is an entirely different perspective you might be missing. Is there a better alternative? Turns out, its peer Paychex gives you more. Paychex (PAYX) stock offers superior revenue growth across key periods, better profitability, and relatively lower valuation vs Automatic Data Processing (ADP) stock, suggesting you may be better off investing in PAYX
- PAYX’s quarterly revenue growth was 18.3%, vs. ADP’s 6.2%.
- In addition, its Last 12 Months revenue growth came in at 12.4%, ahead of ADP’s 6.6%.
- PAYX leads on profitability over both periods – LTM margin of 37.1% and 3-year average of 39.7%.
These differences become even clearer when you look at the financials side by side. The table highlights how ADP’s fundamentals stack up against those of PAYX on growth, margins, momentum, and valuation multiples.
Valuation & Performance Overview
| ADP | PAYX | Preferred | |
|---|---|---|---|
| Valuation | |||
| P/EBIT Ratio | 17.0 | 15.6 | PAYX |
| Revenue Growth | |||
| Last Quarter | 6.2% | 18.3% | PAYX |
| Last 12 Months | 6.6% | 12.4% | PAYX |
| Last 3 Year Average | 7.1% | 7.9% | PAYX |
| Operating Margins | |||
| Last 12 Months | 26.3% | 37.1% | PAYX |
| Last 3 Year Average | 25.9% | 39.7% | PAYX |
| Momentum | |||
| Last 3 Year Return | 11.5% | -9.3% | ADP |
Note: For “Last 3 Year Return” metric, preferred stock is one with higher returns unless the returns are too high (>300%) which creates risk of sell off.
See more revenue details: ADP Revenue Comparison | PAYX Revenue Comparison
See more margin details: ADP Operating Income Comparison | PAYX Operating Income Comparison
- Automatic Data Processing Stock Pulls Back to Support – Smart Entry?
- Automatic Data Processing Stock Capital Return Hits $28 Bil
- Automatic Data Processing Stock at Support Zone – Bargain or Trap?
- Ten-Year Tally: Automatic Data Processing Stock Delivers $28 Bil Gain
- Paycom Software vs Automatic Data Processing: Which Is the Stronger Buy Today?
- ADP Near Crucial Support Level – Buy Signal Ahead
See detailed fundamentals on Buy or Sell PAYX Stock and Buy or Sell ADP Stock. Below we compare market return and related metrics across years.
Historical Market Performance
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | Avg | Best | |
|---|---|---|---|---|---|---|---|---|---|
| Returns | |||||||||
| ADP Return | 43% | -1% | -0% | 28% | -10% | -4% | 56% | ||
| PAYX Return | 50% | -13% | 6% | 21% | -17% | -8% | 28% | ||
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | 2% | 86% | <=== | |
| Monthly Win Rates [3] | |||||||||
| ADP Win Rate | 67% | 50% | 50% | 75% | 42% | 50% | 56% | ||
| PAYX Win Rate | 67% | 42% | 42% | 75% | 42% | 0% | 44% | ||
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 100% | 71% | <=== | |
| Max Drawdowns [4] | |||||||||
| ADP Max Drawdown | -9% | -20% | -12% | -0% | -14% | -4% | -10% | ||
| PAYX Max Drawdown | -7% | -19% | -8% | -2% | -20% | -8% | -11% | ||
| S&P 500 Max Drawdown | -1% | -25% | -1% | -2% | -15% | -1% | -7% | <=== | |
[1] Cumulative total returns since the beginning of 2021
[2] 2026 data is for the year up to 2/3/2026 (YTD)
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
No matter how good the numbers, stock investment is never a smooth ride. There is a risk you must factor in. Read PAYX Dip Buyer Analyses and ADP Dip Buyer Analyses to see how these stocks have fallen and recovered in the past.
Still not sure about ADP or PAYX? Consider portfolio approach.
Portfolios Are The Smarter Way To Invest
Individual stocks are unpredictable. A smart portfolio keeps you invested, limits downside shocks, and provides upside exposure
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.