Investors interested in Business Services stocks should always be looking to find the best-performing companies in the group. Automatic Data Processing (ADP) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? A quick glance at the company's year-to-date performance in comparison to the rest of the Business Services sector should help us answer this question.
Automatic Data Processing is one of 329 individual stocks in the Business Services sector. Collectively, these companies sit at #6 in the Zacks Sector Rank. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the average Zacks Rank of the individual stocks within the groups.
The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. Automatic Data Processing is currently sporting a Zacks Rank of #2 (Buy).
Over the past 90 days, the Zacks Consensus Estimate for ADP's full-year earnings has moved 3.7% higher. This is a sign of improving analyst sentiment and a positive earnings outlook trend.
According to our latest data, ADP has moved about 0.8% on a year-to-date basis. Meanwhile, stocks in the Business Services group have lost about 17.5% on average. This means that Automatic Data Processing is performing better than its sector in terms of year-to-date returns.
One other Business Services stock that has outperformed the sector so far this year is ADTRAN Holdings (ADTN). The stock is up 4.5% year-to-date.
Over the past three months, ADTRAN Holdings' consensus EPS estimate for the current year has increased 12.6%. The stock currently has a Zacks Rank #1 (Strong Buy).
Looking more specifically, Automatic Data Processing belongs to the Outsourcing industry, a group that includes 14 individual stocks and currently sits at #44 in the Zacks Industry Rank. On average, stocks in this group have lost 1.9% this year, meaning that ADP is performing better in terms of year-to-date returns.
On the other hand, ADTRAN Holdings belongs to the Technology Services industry. This 180-stock industry is currently ranked #138. The industry has moved -30% year to date.
Investors with an interest in Business Services stocks should continue to track Automatic Data Processing and ADTRAN Holdings. These stocks will be looking to continue their solid performance.
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