Cramer Pits ADP Against Paychex... (ADP) (PAYX)
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Automatic Data Processing (NYSE: ADP) and Paychex (Nasdaq: PAYX) are two payroll processors with plenty of upside in store, but which one is the better dividend play?
Stock shaman Jim Cramer will answer that question for you.
Cramer notes both pay decent dividends: ADP's recently raised $0.395 per share dividend yields 3.06 percent while Paychex's $0.31 per share yields 4.18 percent. Cramer pointed out both companies go for about 18x earnings, and have growth rates of about 10 percent.
On growth potential, Cramer likes Paychex as the company has more exposure to payroll services -- a business which accelerates as hiring starts to grow.
Cramer said Paychex has more exposure to "insanely low" short-term borrowing rates, giving ADP the advantage in that area.
Though ADP looks like the better dividend stock on the surface, Cramer is leaning in the direction of Paychex for its growth potential and current yield.
Shares of Paychex are up 0.17 percent Monday afternoon, while shares of ADP are down 0.27 percent.
Stock shaman Jim Cramer will answer that question for you.
Cramer notes both pay decent dividends: ADP's recently raised $0.395 per share dividend yields 3.06 percent while Paychex's $0.31 per share yields 4.18 percent. Cramer pointed out both companies go for about 18x earnings, and have growth rates of about 10 percent.
On growth potential, Cramer likes Paychex as the company has more exposure to payroll services -- a business which accelerates as hiring starts to grow.
Cramer said Paychex has more exposure to "insanely low" short-term borrowing rates, giving ADP the advantage in that area.
Though ADP looks like the better dividend stock on the surface, Cramer is leaning in the direction of Paychex for its growth potential and current yield.
Shares of Paychex are up 0.17 percent Monday afternoon, while shares of ADP are down 0.27 percent.
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