HQY vs PCTY vs PAYC vs PAYX vs ADP

For growth investors, Paylocity Holding Corporation (PCTY) is the stronger pick with 13.

7% revenue growth year-over-year, versus 5. 6% for Paychex, Inc. (PAYX). Paycom Software, Inc. (PAYC) offers the better valuation at 17. 1x trailing P/E (12. 6x forward), making it the more compelling value choice. Analysts rate HealthEquity, Inc. (HQY) a "Buy" — based on 27 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, Paycom Software, Inc.

(PAYC) is the cheapest at 17. 1x versus HealthEquity, Inc. at 34. 1x. On forward P/E, Paycom Software, Inc. is actually cheaper at 12. 6x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: HealthEquity, Inc. wins at 0. 26x versus Paychex, Inc. 's 2. 00x — a PEG below 1. 0 traditionally signals the market is underpricing earnings growth.

Over the past 5 years, Automatic Data Processing, Inc.

(ADP) delivered a total return of +23. 3%, compared to -56. 3% for Paycom Software, Inc. (PAYC). Over 10 years, the gap is even starker: PAYC returned +267. 8% versus PAYX's +134. 8%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), Automatic Data Processing, Inc.

(ADP) is the lower-risk stock at 0. 34β versus HealthEquity, Inc. 's 1. 02β — meaning HQY is approximately 204% more volatile than ADP relative to the S&P 500. On balance sheet safety, HealthEquity, Inc. (HQY) carries a lower debt/equity ratio of 2% versus 146% for Automatic Data Processing, Inc. — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), Paylocity Holding Corporation (PCTY) is pulling ahead at 13.

7% versus 5. 6% for Paychex, Inc. (PAYX). On earnings-per-share growth, the picture is similar: HealthEquity, Inc. grew EPS 125. 7% year-over-year, compared to -9. 4% for Paycom Software, Inc.. Over a 3-year CAGR, PCTY leads at 23. 2% annualised revenue growth. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

Paychex, Inc.

(PAYX) is the more profitable company, earning 29. 7% net margin versus 14. 2% for Paylocity Holding Corporation — meaning it keeps 29. 7% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: PAYX leads at 39. 6% versus 19. 1% for PCTY. At the gross margin level — before operating expenses — PAYC leads at 78. 6%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential.

By this metric, HealthEquity, Inc. (HQY) is the more undervalued stock at a PEG of 0. 26x versus Paychex, Inc. 's 2. 00x. A PEG below 1. 0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, Paycom Software, Inc. (PAYC) trades at 12. 6x forward P/E versus 21. 4x for HealthEquity, Inc. — 8. 9x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for PCTY: 35. 4% to $147. 73.

In this comparison, PAYX (4.

2% yield), ADP (2. 7% yield), PAYC (1. 1% yield) pay a dividend. HQY, PCTY do not pay a meaningful dividend and should not be held primarily for income.

For long-horizon retirement investors, Automatic Data Processing, Inc.

(ADP) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0. 34), 2. 7% yield, +191. 2% 10Y return). Both have compounded well over 10 years (ADP: +191. 2%, HQY: +231. 5%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

These companies operate in different sectors (HQY (Healthcare) and PCTY (Technology) and PAYC (Technology) and PAYX (Industrials) and ADP (Industrials)), which means they face different economic cycles, regulatory environments, and macro sensitivities — making direct comparison nuanced.

In terms of investment character: HQY is a small-cap quality compounder stock; PCTY is a small-cap quality compounder stock; PAYC is a small-cap deep-value stock; PAYX is a mid-cap income-oriented stock; ADP is a mid-cap quality compounder stock. PAYC, PAYX, ADP pay a dividend while HQY, PCTY do not, making them suitable for different income and tax situations. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.