Microsoft vs. Automatic Data Processing: Scale vs. Seasonality in Revenue
Microsoft's revenue has grown every quarter in the past two years, while ADP swings between peaks and troughs -- a divergence that reveals starkly different business models.
Overview
Some investors like to consider the relative size of a company’s revenue to determine its long-term growth potential. But in the case of Microsoft (NASDAQ:MSFT) and Automatic Data Processing (NASDAQ:ADP), sometimes size doesn’t mean much.
Despite Microsoft’s massive scale and revenue, it is growing revenue at a much higher rate than Automatic Data Processing. Here’s a comparison of these two companies, their recent revenue trajectory, and why Microsoft might be the better growth stock to hold for the long term.
Details
Microsoft primarily generates revenue by selling software, cloud computing infrastructure, and personal computing devices to global customers. Revenue has consistently grown at a mid-teens rate over the past eight quarters.
Source
Originally published at www.fool.com.