Critical Comparison: HeartCore Enterprises (NASDAQ:HTCR) vs. Automatic Data Processing (NASDAQ:ADP)

HeartCore Enterprises (NASDAQ:HTCR) and Automatic Data Processing (NASDAQ:ADP) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, profitability, analyst recommendations and valuation.

Analyst Ratings

This is a breakdown of current recommendations for HeartCore Enterprises and Automatic Data Processing, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HeartCore Enterprises	0	0	0	0	0.00
Automatic Data Processing	2	8	2	0	2.00

Automatic Data Processing has a consensus target price of $289.91, indicating a potential downside of 5.55%. Given Automatic Data Processing’s stronger consensus rating and higher probable upside, analysts plainly believe Automatic Data Processing is more favorable than HeartCore Enterprises.

Dividends

HeartCore Enterprises pays an annual dividend of $0.08 per share and has a dividend yield of 4.7%. Automatic Data Processing pays an annual dividend of $6.16 per share and has a dividend yield of 2.0%. HeartCore Enterprises pays out 33.3% of its earnings in the form of a dividend. Automatic Data Processing pays out 65.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Automatic Data Processing has raised its dividend for 49 consecutive years. HeartCore Enterprises is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares HeartCore Enterprises and Automatic Data Processing”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HeartCore Enterprises	$30.29 million	1.17	-$4.19 million	$0.24	7.04
Automatic Data Processing	$18.45 billion	6.78	$3.75 billion	$9.37	32.76

Automatic Data Processing has higher revenue and earnings than HeartCore Enterprises. HeartCore Enterprises is trading at a lower price-to-earnings ratio than Automatic Data Processing, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

HeartCore Enterprises has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500. Comparatively, Automatic Data Processing has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500.

Profitability

This table compares HeartCore Enterprises and Automatic Data Processing’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HeartCore Enterprises	16.25%	65.33%	22.92%
Automatic Data Processing	19.72%	82.36%	6.89%

Insider & Institutional Ownership

1.7% of HeartCore Enterprises shares are held by institutional investors. Comparatively, 80.0% of Automatic Data Processing shares are held by institutional investors. 64.2% of HeartCore Enterprises shares are held by company insiders. Comparatively, 0.2% of Automatic Data Processing shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Automatic Data Processing beats HeartCore Enterprises on 12 of the 17 factors compared between the two stocks.

About HeartCore Enterprises

HeartCore Enterprises, Inc., a software development company, provides Software as a Service solutions to enterprise customers in Japan and internationally. Its customer experience management platform includes marketing, sales, service, and content management systems, as well as other tools and integrations, which enable companies to enhance the customer experience and drive engagement. The company also operates a digital transformation business that offers customers with robotics process automation, process mining, and task mining to accelerate the digital transformation of enterprises. In addition, it provides consulting services; and education, services, and support solutions. The company was founded in 2009 and is headquartered in Tokyo, Japan.

About Automatic Data Processing

Automatic Data Processing, Inc. provides cloud-based human capital management solutions worldwide. It operates in two segments, Employer Services and Professional Employer Organization (PEO). The Employer Services segment offers strategic, cloud-based platforms, and human resources (HR) outsourcing solutions. Its offerings include payroll services, benefits administration, talent management, HR management, workforce management, insurance, retirement, and compliance services, as well as integrated HCM solutions. The PEO Services segment provides HR outsourcing solution to businesses through a co-employment model. This segment offers employee benefits, protection and compliance, talent engagement, expertise, comprehensive outsourcing, and recruitment process outsourcing services. Automatic Data Processing, Inc. was founded in 1949 and is headquartered in Roseland, New Jersey.