Paycom Software vs Automatic Data Processing: Which Is the Stronger Buy Today?
Even as Automatic Data Processing fell -6.6% during the past Day, its peer Paycom Software may be a better choice. Consistently evaluating alternatives is core to sound investment approach. Paycom Software (PAYC) 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 PAYC
- PAYC’s quarterly revenue growth was 10.5%, vs. ADP’s 7.5%.
- In addition, its Last 12 Months revenue growth came in at 10.2%, ahead of ADP’s 7.1%.
- PAYC leads on profitability over both periods – LTM margin of 28.1% and 3-year average of 29.5%.
Markets swing. Quality endures. See how High Quality Portfolio stays balanced.
ADP provides cloud-based human capital management and HR outsourcing solutions for small to mid-sized businesses through Employer Services and Professional Employer Organization segments. PAYC cloud-based human capital management software offering talent acquisition, applicant tracking, background checks, onboarding, and tax credit services for small to mid-sized U.S. companies.
Valuation & Performance Overview
- 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
- ADP Near Crucial Support Level – Buy Signal Ahead
- What To Expect From ADP’s Q1 Results?
- What To Expect From ADP’s Q4 Earnings?
| ADP | PAYC | Preferred | |
|---|---|---|---|
| Valuation | |||
| P/EBIT Ratio | 19.6 | 19.0 | PAYC |
| Revenue Growth | |||
| Last Quarter | 7.5% | 10.5% | PAYC |
| Last 12 Months | 7.1% | 10.2% | PAYC |
| Last 3 Year Average | 7.6% | 17.6% | PAYC |
| Operating Margins | |||
| Last 12 Months | 26.3% | 28.1% | PAYC |
| Last 3 Year Average | 25.7% | 29.5% | PAYC |
| Momentum | |||
| Last 3 Year Return | 14.8% | -44.4% | 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 | PAYC Revenue Comparison
See more margin details: ADP Operating Income Comparison | PAYC Operating Income Comparison
But do these numbers tell the full story? Read Buy or Sell PAYC Stock to see if Paycom Software’s edge holds up under the hood or if Automatic Data Processing still has cards to play (see Buy or Sell ADP Stock).
Historical Market Performance
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Total [1] | Avg | Best | |
|---|---|---|---|---|---|---|---|---|---|
| Returns | |||||||||
| ADP Return | 6% | 43% | -1% | -0% | 28% | -9% | 86% | ||
| PAYC Return | 71% | -8% | -25% | -33% | -0% | -3% | -23% | ||
| S&P 500 Return | 16% | 27% | -19% | 24% | 23% | 17% | 110% | <=== | |
| Monthly Win Rates [3] | |||||||||
| ADP Win Rate | 67% | 67% | 50% | 50% | 75% | 44% | 59% | ||
| PAYC Win Rate | 75% | 50% | 50% | 42% | 42% | 56% | 52% | ||
| S&P 500 Win Rate | 58% | 75% | 42% | 67% | 75% | 67% | 64% | <=== | |
| Max Drawdowns [4] | |||||||||
| ADP Max Drawdown | -36% | -9% | -20% | -12% | -0% | -5% | -14% | ||
| PAYC Max Drawdown | -38% | -32% | -37% | -51% | -32% | -6% | -33% | ||
| S&P 500 Max Drawdown | -31% | -1% | -25% | -1% | -2% | -15% | -12% | <=== | |
[1] Cumulative total returns since the beginning of 2020
[2] 2025 data is for the year up to 10/29/2025 (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 PAYC Dip Buyer Analyses and ADP Dip Buyer Analyses to see how these stocks have fallen and recovered in the past.