Automatic Data Current Valuation vs. Return On Equity
| ADP Stock | EUR 291.10 1.65 0.56% |
For Automatic Data profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Automatic Data to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Automatic Data Processing utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Automatic Data's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Automatic Data Processing over time as well as its relative position and ranking within its peers.
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Automatic Data Processing Return On Equity vs. Current Valuation Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Automatic Data's current stock value. Our valuation model uses many indicators to compare Automatic Data value to that of its competitors to determine the firm's financial worth. Automatic Data Processing is the top company in current valuation category among its peers. It also is number one stock in return on equity category among its peers . The ratio of Current Valuation to Return On Equity for Automatic Data Processing is about 133,511,275,198 . The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Automatic Data's earnings, one of the primary drivers of an investment's value.Automatic Current Valuation vs. Competition
Automatic Data Processing is the top company in current valuation category among its peers. After adjusting for long-term liabilities, total market size of Business Services industry is presently estimated at about 136.04 Billion. Automatic Data totals roughly 104.54 Billion in current valuation claiming about 77% of stocks in Business Services industry.
Automatic Return On Equity vs. Current Valuation
Enterprise Value is a firm valuation proxy that approximates the current market value of a company. It is typically used to determine the takeover or merger price of a firm. Unlike Market Cap, this measure takes into account the entire liquid asset, outstanding debt, and exotic equity instruments that the company has on its balance sheet. When a takeover occurs, the parent company will have to assume the target company's liabilities but will take possession of all cash and cash equivalents.
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| = | 104.54 B |
Enterprise Value can be a useful tool to compare companies with different capital structures. Long term liability and current cash or cash equivalents can have a huge impact on market valuation of a given company.
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
Automatic Data |
| = | 0.78 |
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Automatic Return On Equity Comparison
Automatic Data is currently under evaluation in return on equity category among its peers.
Automatic Data Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Automatic Data, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Automatic Data will eventually generate negative long term returns. The profitability progress is the general direction of Automatic Data's change in net profit over the period of time. It can combine multiple indicators of Automatic Data, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Automatic Data Processing, Inc. provides business process outsourcing services worldwide. The company was founded in 1949 and is headquartered in Roseland, New Jersey. AUTOM DATA is traded on Frankfurt Stock Exchange in Germany.
Automatic Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Automatic Data. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Automatic Data position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Automatic Data's important profitability drivers and their relationship over time.
Use Automatic Data in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Automatic Data position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Automatic Data will appreciate offsetting losses from the drop in the long position's value.Automatic Data Pair Trading
Automatic Data Processing Pair Trading Analysis
The ability to find closely correlated positions to Automatic Data could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Automatic Data when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Automatic Data - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Automatic Data Processing to buy it.
The correlation of Automatic Data is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Automatic Data moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Automatic Data Processing moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Automatic Data can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Automatic Data position
In addition to having Automatic Data in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
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Additional Information and Resources on Investing in Automatic Stock
When determining whether Automatic Data Processing is a good investment, qualitative aspects like company management, corporate governance, and ethical practices play a significant role. A comparison with peer companies also provides context and helps to understand if Automatic Stock is undervalued or overvalued. This multi-faceted approach, blending both quantitative and qualitative analysis, forms a solid foundation for making an informed investment decision about Automatic Data Processing Stock. Highlighted below are key reports to facilitate an investment decision about Automatic Data Processing Stock:Check out Trending Equities. You can also try the Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
To fully project Automatic Data's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Automatic Data Processing at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Automatic Data's income statement, its balance sheet, and the statement of cash flows.