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Is Automatic Data Processing (ADP) Outperforming Other Business Services Stocks This Year?

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The Business Services group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Automatic Data Processing (ADP - Free Report) 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? By taking a look at the stock's year-to-date performance in comparison to its Business Services peers, we might be able to answer that question.

Automatic Data Processing is a member of the Business Services sector. This group includes 277 individual stocks and currently holds a Zacks Sector Rank of #6. The Zacks Sector Rank includes 16 different groups and is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors.

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).

The Zacks Consensus Estimate for ADP's full-year earnings has moved 2.1% higher within the past quarter. This is a sign of improving analyst sentiment and a positive earnings outlook trend.

Based on the latest available data, ADP has gained about 37.3% so far this year. In comparison, Business Services companies have returned an average of -24.3%. This means that Automatic Data Processing is performing better than its sector in terms of year-to-date returns.

BGSF (BGSF - Free Report) is another Business Services stock that has outperformed the sector so far this year. Since the beginning of the year, the stock has returned 3.9%.

For BGSF, the consensus EPS estimate for the current year has increased 0.8% over the past three months. The stock currently has a Zacks Rank #2 (Buy).

To break things down more, Automatic Data Processing belongs to the Outsourcing industry, a group that includes 13 individual companies and currently sits at #81 in the Zacks Industry Rank. On average, this group has gained an average of 35.2% so far this year, meaning that ADP is performing better in terms of year-to-date returns.

In contrast, BGSF falls under the Business - Services industry. Currently, this industry has 29 stocks and is ranked #98. Since the beginning of the year, the industry has moved +105.7%.

Investors interested in the Business Services sector may want to keep a close eye on Automatic Data Processing and BGSF as they attempt to continue their solid performance.


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