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Automatic Data Processing

Nasdaq:ADP
Snowflake Description

Excellent balance sheet established dividend payer.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
ADP
Nasdaq
$73B
Market Cap
  1. Home
  2. US
  3. Software
Company description

Automatic Data Processing, Inc. provides business process outsourcing services worldwide. The last earnings update was 52 days ago. More info.


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ADP Share Price and Events
7 Day Returns
1.1%
NasdaqGS:ADP
1.7%
US IT
2%
US Market
1 Year Returns
22.8%
NasdaqGS:ADP
25.1%
US IT
4.3%
US Market
ADP Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Automatic Data Processing (ADP) 1.1% 3.7% 7.4% 22.8% 95.8% 111.6%
US IT 1.7% 5.8% 10.7% 25.1% 103.2% 113%
US Market 2% 4.1% 4.2% 4.3% 43.9% 40.8%
1 Year Return vs Industry and Market
  • ADP underperformed the IT industry which returned 25.1% over the past year.
  • ADP outperformed the Market in United States of America which returned 4.3% over the past year.
Price Volatility
ADP
Industry
5yr Volatility vs Market

Value

 Is Automatic Data Processing undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Automatic Data Processing to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Automatic Data Processing.

NasdaqGS:ADP Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 17 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 8.8%
Perpetual Growth Rate 10-Year US Government Bond Rate 2.7%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NasdaqGS:ADP
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 2.7%
Equity Risk Premium S&P Global 6%
IT Unlevered Beta Simply Wall St/ S&P Global 1.01
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 1.014 (1 + (1- 21%) (2.74%))
1.024
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
1.02
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2.73% + (1.024 * 5.96%)
8.83%

Discounted Cash Flow Calculation for NasdaqGS:ADP using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Automatic Data Processing is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

NasdaqGS:ADP DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (USD, Millions) Source Present Value
Discounted (@ 8.83%)
2019 2,521.22 Analyst x6 2,316.61
2020 2,534.53 Analyst x6 2,139.85
2021 3,117.33 Analyst x3 2,418.30
2022 3,000.00 Analyst x1 2,138.41
2023 3,400.00 Analyst x1 2,226.85
2024 3,623.80 Est @ 6.58% 2,180.82
2025 3,820.45 Est @ 5.43% 2,112.58
2026 3,996.87 Est @ 4.62% 2,030.77
2027 4,158.80 Est @ 4.05% 1,941.56
2028 4,310.80 Est @ 3.65% 1,849.20
Present value of next 10 years cash flows $21,354.95
NasdaqGS:ADP DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2028 × (1 + g) ÷ (Discount Rate – g)
= $4,310.80 × (1 + 2.73%) ÷ (8.83% – 2.73%)
$72,571.83
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= $72,571.83 ÷ (1 + 8.83%)10
$31,131.03
NasdaqGS:ADP Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= $21,354.95 + $31,131.03
$52,485.98
Equity Value per Share
(USD)
= Total value / Shares Outstanding
= $52,485.98 / 435.23
$120.59
NasdaqGS:ADP Discount to Share Price
Calculation Result
Value per share (USD) From above. $120.59
Current discount Discount to share price of $167.76
= -1 x ($167.76 - $120.59) / $120.59
-39.1%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

  • The current share price of Automatic Data Processing is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Automatic Data Processing's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Automatic Data Processing's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NasdaqGS:ADP PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-03-31) in USD $3.88
NasdaqGS:ADP Share Price ** NasdaqGS (2019-06-24) in USD $167.76
United States of America IT Industry PE Ratio Median Figure of 77 Publicly-Listed IT Companies 35.73x
United States of America Market PE Ratio Median Figure of 3,095 Publicly-Listed Companies 17.88x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Automatic Data Processing.

NasdaqGS:ADP PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NasdaqGS:ADP Share Price ÷ EPS (both in USD)

= 167.76 ÷ 3.88

43.18x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Automatic Data Processing is overvalued based on earnings compared to the US IT industry average.
  • Automatic Data Processing is overvalued based on earnings compared to the United States of America market.
Price based on expected Growth
Does Automatic Data Processing's expected growth come at a high price?
Raw Data
NasdaqGS:ADP PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 43.18x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 17 Analysts
15.8%per year
United States of America IT Industry PEG Ratio Median Figure of 66 Publicly-Listed IT Companies 2.53x
United States of America Market PEG Ratio Median Figure of 2,134 Publicly-Listed Companies 1.54x

*Line of best fit is calculated by linear regression .

NasdaqGS:ADP PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 43.18x ÷ 15.8%

2.73x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Automatic Data Processing is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Automatic Data Processing's assets?
Raw Data
NasdaqGS:ADP PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-03-31) in USD $12.05
NasdaqGS:ADP Share Price * NasdaqGS (2019-06-24) in USD $167.76
United States of America IT Industry PB Ratio Median Figure of 128 Publicly-Listed IT Companies 4.35x
United States of America Market PB Ratio Median Figure of 5,255 Publicly-Listed Companies 1.8x
NasdaqGS:ADP PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NasdaqGS:ADP Share Price ÷ Book Value per Share (both in USD)

= 167.76 ÷ 12.05

13.93x

* Primary Listing of Automatic Data Processing.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Automatic Data Processing is overvalued based on assets compared to the US IT industry average.
X
Value checks
We assess Automatic Data Processing's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the IT industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the IT industry average (and greater than 0)? (1 check)
  5. Automatic Data Processing has a total score of 0/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

 How is Automatic Data Processing expected to perform in the next 1 to 3 years based on estimates from 17 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
15.8%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Automatic Data Processing expected to grow at an attractive rate?
  • Automatic Data Processing's earnings growth is expected to exceed the low risk savings rate of 2.7%.
Growth vs Market Checks
  • Automatic Data Processing's earnings growth is expected to exceed the United States of America market average.
  • Automatic Data Processing's revenue growth is positive but not above the United States of America market average.
Annual Growth Rates Comparison
Raw Data
NasdaqGS:ADP Future Growth Rates Data Sources
Data Point Source Value (per year)
NasdaqGS:ADP Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 17 Analysts 15.8%
NasdaqGS:ADP Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 17 Analysts 6.7%
United States of America IT Industry Earnings Growth Rate Market Cap Weighted Average 16.7%
United States of America IT Industry Revenue Growth Rate Market Cap Weighted Average 10.2%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 14%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 7.4%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NasdaqGS:ADP Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (2 months ago) See Below
Future Estimates Average of up to 17 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NasdaqGS:ADP Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2023-06-30 18,600 1
2022-06-30 17,300 1
2021-06-30 16,301 3,709 3,023 9
2020-06-30 15,110 3,195 2,609 17
2019-06-30 14,173 2,772 2,313 15
NasdaqGS:ADP Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2019-03-31 13,991 2,661 1,694
2018-12-31 13,839 2,772 1,601
2018-09-30 13,572 2,420 1,714
2018-06-30 13,326 2,515 1,621
2018-03-31 13,076 2,267 2,010
2017-12-31 12,791 1,960 1,937
2017-09-30 12,540 2,041 1,777
2017-06-30 12,380 2,126 1,733
2017-03-31 12,213 2,332 1,750
2016-12-31 12,051 2,223 1,694
2016-09-30 11,871 2,118 1,525
2016-06-30 11,668 1,897 1,493

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Automatic Data Processing's earnings are expected to grow by 15.8% yearly, however this is not considered high growth (20% yearly).
  • Automatic Data Processing's revenue is expected to grow by 6.7% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NasdaqGS:ADP Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (2 months ago) See Below
Future Estimates Average of up to 17 Analyst Estimates (S&P Global) See Below

All data from Automatic Data Processing Company Filings, last reported 2 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqGS:ADP Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2023-06-30
2022-06-30
2021-06-30 7.11 7.30 6.97 5.00
2020-06-30 6.02 6.30 5.48 10.00
2019-06-30 5.28 5.45 5.18 9.00
NasdaqGS:ADP Past Financials Data
Date (Data in USD Millions) EPS *
2019-03-31 3.88
2018-12-31 3.66
2018-09-30 3.90
2018-06-30 3.68
2018-03-31 4.54
2017-12-31 4.37
2017-09-30 3.99
2017-06-30 3.87
2017-03-31 3.89
2016-12-31 3.75
2016-09-30 3.35
2016-06-30 3.27

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Automatic Data Processing is expected to efficiently use shareholders’ funds in the future (Return on Equity greater than 20%).
X
Future performance checks
We assess Automatic Data Processing's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Automatic Data Processing has a total score of 3/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Automatic Data Processing performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Automatic Data Processing's growth in the last year to its industry (IT).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Automatic Data Processing's year on year earnings growth rate has been positive over the past 5 years.
  • Automatic Data Processing's 1-year earnings growth is negative, it can't be compared to the 5-year average.
  • Automatic Data Processing's 1-year earnings growth is negative, it can't be compared to the US IT industry average.
Earnings and Revenue History
Automatic Data Processing's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Automatic Data Processing Company Filings, last reported 2 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqGS:ADP Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-03-31 13,990.80 1,694.20 3,036.90
2018-12-31 13,839.40 1,601.40 2,992.50
2018-09-30 13,571.80 1,713.60 2,977.60
2018-06-30 13,325.80 1,620.80 2,942.70
2018-03-31 13,076.40 2,009.80 2,878.40
2017-12-31 12,791.10 1,936.80 2,821.70
2017-09-30 12,540.10 1,777.30 2,757.90
2017-06-30 12,379.80 1,733.40 2,704.10
2017-03-31 12,213.20 1,749.60 2,629.10
2016-12-31 12,051.00 1,694.10 2,598.30
2016-09-30 11,870.70 1,524.60 2,584.50
2016-06-30 11,667.80 1,493.40 2,588.80
2016-03-31 11,464.00 1,468.40 2,591.90
2015-12-31 11,239.90 1,426.30 2,575.50
2015-09-30 11,086.40 1,417.40 2,536.90
2015-06-30 10,938.50 1,376.50 2,507.60
2015-03-31 10,789.60 1,349.90 2,450.80
2014-12-31 10,590.30 1,292.60 2,418.30
2014-09-30 10,430.50 1,274.30 2,408.60
2014-06-30 10,226.40 1,242.60 2,370.30
2014-03-31 10,483.60 1,236.20 2,431.30
2013-12-31 10,767.80 1,284.70 2,499.50
2013-09-30 11,012.10 1,320.50 2,543.70
2013-06-30 9,442.00 1,122.20 2,200.40
2013-03-31 11,108.40 1,390.40 2,512.00
2012-12-31 10,909.90 1,359.00 2,478.30
2012-09-30 10,742.60 1,381.80 2,430.20
2012-06-30 10,595.40 1,375.20 2,452.90

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Automatic Data Processing has efficiently used shareholders’ funds last year (Return on Equity greater than 20%).
  • Automatic Data Processing used its assets less efficiently than the US IT industry average last year based on Return on Assets.
  • Automatic Data Processing has improved its use of capital last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Automatic Data Processing's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the IT industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Automatic Data Processing has a total score of 3/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Automatic Data Processing's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Automatic Data Processing's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Automatic Data Processing is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Automatic Data Processing's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Automatic Data Processing's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • Low level of unsold assets.
  • Debt is covered by short term assets, assets are 20.4x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Automatic Data Processing Company Filings, last reported 2 months ago.

NasdaqGS:ADP Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2019-03-31 5,246.20 2,002.30 1,833.50
2018-12-31 4,763.90 3,208.30 2,789.00
2018-09-30 4,678.80 2,455.40 1,617.40
2018-06-30 3,459.60 2,002.40 2,173.30
2018-03-31 4,029.20 2,002.40 2,293.60
2017-12-31 3,931.20 2,002.40 1,776.60
2017-09-30 3,953.40 2,131.50 2,476.80
2017-06-30 3,977.00 2,002.40 2,783.60
2017-03-31 4,103.10 2,010.30 2,998.70
2016-12-31 3,815.10 2,002.50 2,746.20
2016-09-30 4,250.10 2,007.70 2,817.60
2016-06-30 4,481.60 2,007.70 3,214.60
2016-03-31 4,503.20 2,007.70 2,965.10
2015-12-31 4,206.20 1,994.80 2,821.80
2015-09-30 4,630.20 1,995.20 3,211.90
2015-06-30 4,808.50 9.20 1,665.90
2015-03-31 5,178.10 9.70 1,835.50
2014-12-31 5,492.20 10.30 1,952.70
2014-09-30 5,827.30 1,947.90 2,479.50
2014-06-30 6,670.20 2,184.50 1,416.60
2014-03-31 6,616.10 12.10 1,693.90
2013-12-31 6,258.50 12.60 1,288.90
2013-09-30 6,192.80 2,832.10 1,179.70
2013-06-30 6,189.90 260.60 1,726.40
2013-03-31 6,561.10 15.30 1,680.30
2012-12-31 6,395.30 29.30 1,421.30
2012-09-30 6,292.70 459.00 1,149.80
2012-06-30 6,114.00 16.80 1,578.50
  • Automatic Data Processing's level of debt (38.2%) compared to net worth is satisfactory (less than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (0.5% vs 38.2% today).
  • Debt is well covered by operating cash flow (132.9%, greater than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 100.1x coverage).
X
Financial health checks
We assess Automatic Data Processing's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Automatic Data Processing has a total score of 5/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is Automatic Data Processing's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
1.88%
Current annual income from Automatic Data Processing dividends. Estimated to be 1.84% next year.
If you bought $2,000 of Automatic Data Processing shares you are expected to receive $38 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Automatic Data Processing's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.44%).
  • Automatic Data Processing's dividend is below the markets top 25% of dividend payers in United States of America (3.73%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NasdaqGS:ADP Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 17 Analyst Estimates (S&P Global) See Below
United States of America IT Industry Average Dividend Yield Market Cap Weighted Average of 34 Stocks 1.3%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 2012 Stocks 2.4%
United States of America Minimum Threshold Dividend Yield 10th Percentile 0.8%
United States of America Bottom 25% Dividend Yield 25th Percentile 1.4%
United States of America Top 25% Dividend Yield 75th Percentile 3.7%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NasdaqGS:ADP Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
2023-06-30
2022-06-30
2021-06-30 3.31 10.00
2020-06-30 3.11 15.00
2019-06-30 2.93 14.00
NasdaqGS:ADP Past Annualized Dividends Data
Date (Data in $) Dividend per share (annual) Avg. Yield (%)
2019-04-03 3.160 1.947
2019-01-15 3.160 2.134
2018-11-06 3.160 2.301
2018-08-02 2.760 1.919
2018-04-11 2.760 2.123
2018-01-16 2.520 2.170
2017-11-07 2.520 2.190
2017-08-01 2.280 2.068
2017-04-05 2.280 2.230
2017-01-17 2.280 2.242
2016-11-08 2.280 2.317
2016-08-02 2.120 2.397
2016-04-06 2.120 2.366
2016-01-19 2.120 2.497
2015-11-10 2.120 2.515
2015-08-04 1.960 2.386
2015-04-08 1.960 2.334
2015-01-22 1.960 2.263
2014-11-11 1.960 2.316
2014-08-05 1.920 2.398
2014-04-09 1.920 2.437
2014-01-23 1.920 2.501
2013-11-12 1.920 2.420
2013-08-06 1.740 2.376
2013-04-10 1.740 2.507
2013-01-25 1.740 2.789
2012-11-13 1.740 3.026
2012-08-07 1.580 2.720
2012-04-25 1.580 2.897
2012-01-26 1.580 2.884
2011-11-08 1.580 2.997
2011-08-09 1.440 2.922
2011-04-28 1.440 2.731
2011-02-08 1.440 2.837
2010-11-09 1.440 3.060
2010-08-09 1.360 3.264
2010-04-29 1.360 3.284
2010-02-09 1.360 3.132
2009-11-10 1.360 3.193
2009-08-13 1.320 3.345

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Dividends per share have been stable in the past 10 years.
  • Dividends per share have increased over the past 10 years.
Current Payout to shareholders
What portion of Automatic Data Processing's earnings are paid to the shareholders as a dividend.
  • Dividends paid are covered by earnings (1.3x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be well covered by earnings (2.1x coverage).
X
Income/ dividend checks
We assess Automatic Data Processing's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.8%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Automatic Data Processing afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Automatic Data Processing has a total score of 5/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of Automatic Data Processing's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Carlos Rodriguez
COMPENSATION $12,489,040
AGE 54
TENURE AS CEO 7.6 years
CEO Bio

Mr. Carlos A. Rodriguez has been the Chief Executive Officer of Automatic Data Processing, Inc. since November 8, 2011 and has been its President since May 2011. Mr. Rodriguez served as the Chief Operating Officer of Automatic Data Processing Inc. from May 2011 to November 8, 2011. Mr. Rodriguez served as the President of Employer Services- National Account Services, ADP Canada, and GlobalView and Employer Services International at Automatic Data Processing, Inc. from March 2010 to May 2011. Mr. Rodriguez served as the President of Employer Services - Small Business Services Division of Automatic Data Processing, Inc. from 1999 to 2010. Having started his career at the company in 1999, Mr. Rodriguez previously served as president of several key businesses, including National Accounts Services, Employer Services International, Small Business Services, and Professional Employer Organization, giving him deep institutional knowledge across the Automatic Data Processing, Inc.’s business. He served as the President of TotalSource, Employer Services of ADP from 2000 to 2007. He joined ADP in 1999 through its acquisition of Vincam, where he served initially as Chief Financial Officer for a short period before becoming President of ADP TotalSource®. He has been a Director of Automatic Data Processing, Inc., since November 8, 2011. He serves as a Director of A-T Children's Project. He served as a Director at Hubbell Inc. since June 2009 until May 03, 2016. He is a Member of World 50, Inc. Mr. Rodriguez holds a BA in Government from Harvard College and an MBA from the Harvard Business School.

CEO Compensation
  • Carlos's compensation has been consistent with company performance over the past year, both up more than 20%.
  • Carlos's remuneration is about average for companies of similar size in United States of America.
Management Team Tenure

Average tenure and age of the Automatic Data Processing management team in years:

1.4
Average Tenure
51
Average Age
  • The average tenure for the Automatic Data Processing management team is less than 2 years, this suggests a new team.
Management Team

Carlos Rodriguez

TITLE
CEO, President & Director
COMPENSATION
$12M
AGE
54
TENURE
7.6 yrs

Michael Bonarti

TITLE
Director
COMPENSATION
$3M
AGE
53
TENURE
9 yrs

Dermot O'Brien

TITLE
Chief Transformation Officer
COMPENSATION
$3M
AGE
52
TENURE
1.4 yrs

Kathleen Winters

TITLE
Corporate Vice President & CFO
AGE
50
TENURE
0.2 yrs

Don Weinstein

TITLE
Corporate Vice President of Global Product & Technology
AGE
49
TENURE
1.4 yrs

Christian Greyenbuhl

TITLE
Vice President of Investor Relation
TENURE
3.4 yrs

Doug Politi

TITLE
President of Compliance Solutions
AGE
56
TENURE
1.4 yrs

Allyce Hackmann

TITLE
Senior Director of Public Relations

Tom Perrotti

TITLE
President of Worldwide Sales & Marketing
AGE
49
TENURE
2.4 yrs

Sreeni Kutam

TITLE
Chief Human Resources Officer
AGE
48
TENURE
1.4 yrs
Board of Directors Tenure

Average tenure and age of the Automatic Data Processing board of directors in years:

7.6
Average Tenure
61.5
Average Age
  • The tenure for the Automatic Data Processing board of directors is about average.
Board of Directors

John Jones

TITLE
Non-Executive Chairman of the Board
COMPENSATION
$504K
AGE
67
TENURE
3.6 yrs

Carlos Rodriguez

TITLE
CEO, President & Director
COMPENSATION
$12M
AGE
54
TENURE
7.6 yrs

Michael Bonarti

TITLE
Director
COMPENSATION
$3M
AGE
53

Linda Gooden

TITLE
Director
COMPENSATION
$329K
AGE
65
TENURE
10.3 yrs

Dick Clark

TITLE
Director
COMPENSATION
$339K
AGE
72
TENURE
7.8 yrs

Mike Gregoire

TITLE
Director
COMPENSATION
$314K
AGE
52
TENURE
5.4 yrs

Sandra Wijnberg

TITLE
Director
COMPENSATION
$331K
AGE
62
TENURE
3 yrs

Eric Fast

TITLE
Director
COMPENSATION
$346K
AGE
69
TENURE
11.8 yrs

Robert Hubbard

TITLE
Director
COMPENSATION
$359K
AGE
59
TENURE
15.4 yrs

Peter Bisson

TITLE
Director
COMPENSATION
$324K
AGE
61
TENURE
3.8 yrs
Who owns this company?
Recent Insider Trading
  • No 3 month individual insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price ($) Value ($)
17. Aug 18 Buy Pershing Square Capital Management, L.P. Company 25. Jul 18 25. Jul 18 1 $137.86 $138
X
Management checks
We assess Automatic Data Processing's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Automatic Data Processing has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

Simply Wall St News

With A -3.6% Earnings Drop, Is Automatic Data Processing, Inc.'s (NASDAQ:ADP) A Concern?

Assessing Automatic Data Processing, Inc.'s (NASDAQ:ADP) past track record of performance is a useful exercise for investors. … Below, I assess ADP's latest performance announced on 30 September 2018 and evaluate these figures to its historical trend and industry movements. … Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 7.9%, indicating the rate at which ADP is growing has slowed down

Simply Wall St -

Automatic Data Processing Inc (NASDAQ:ADP): A Look At Return On Capital

and want to begin learning the link between Automatic Data Processing Inc (NASDAQ:ADP)’s return fundamentals and stock market performance. … Thus, to understand how your money can grow by investing in Automatic Data Processing, you need to look at what the company returns to owners for the use of their capital, which can be done in many ways but today we will use return on capital employed (ROCE) … Automatic Data Processing's Return On Capital Employed

Simply Wall St -

How Do Analysts See Automatic Data Processing Inc (NASDAQ:ADP) Performing In The Next Couple Of Years?

In June 2018, Automatic Data Processing Inc (NASDAQ:ADP) released its most recent earnings announcement, whicha

Simply Wall St -

What Should You Know About The Future Of Automatic Data Processing Inc's (NASDAQ:ADP)?

Based on Automatic Data Processing Inc's (NASDAQ:ADP) earnings update in June 2018,. … with earnings expected to grow by 38.15% in the upcoming year … the past 5-year average growth rate of 5.01%

Simply Wall St -

Why Automatic Data Processing Inc’s (NASDAQ:ADP) Cash Is A Factor You Need To Consider

Automatic Data Processing Inc (NASDAQ:ADP) shareholders, and potential investors, need to understand how much cash the business makes from its core operational activities, as well as how much is invested back into the business. … I’ve analysed below, the health and outlook of Automatic Data Processing’s cash flow, which will help you understand the stock from a cash standpoint. … Automatic Data Processing’s free cash flow (FCF) is the level of cash flow the business generates from its operational activities, after it reinvests in the company as capital expenditure.

Simply Wall St -

Is It Too Late To Buy Automatic Data Processing Inc (NASDAQ:ADP) At Its July Price?

Automatic Data Processing Inc (NASDAQ:ADP) is considered a high-growth stock, but its last closing price of $137.41 left some investors wondering if this high future earnings potential can be rationalized by its current price tag. … View our latest analysis for Automatic Data Processing? … Analysts are predicting good growth prospects for Automatic Data Processing over the next couple of years

Simply Wall St -

Who Owns Automatic Data Processing Inc (NASDAQ:ADP)?

I am going to take a deep dive into Automatic Data Processing Inc’s (NASDAQ:ADP) most recent ownership structure, not a frequent subject of discussion among individual investors. … Ownership structure has been found to have an impact on shareholder returns in both short- and long-term. … Check out our latest analysis for Automatic Data Processing

Simply Wall St -

Is It Too Late To Buy Automatic Data Processing Inc (NASDAQ:ADP)?

Let's talk about the popular Automatic Data Processing Inc (NASDAQ:ADP). … As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock

Simply Wall St -

Where Automatic Data Processing Inc's (NASDAQ:ADP) Earnings Growth Stands Against Its Industry

When Automatic Data Processing Inc (NASDAQ:ADP) released its most recent earnings update (31 March 2018), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. … Understanding how Automatic Data Processing performed requires a benchmark rather than trying to assess a standalone number at one point in time. … Check out our latest analysis for Automatic Data Processing?

Simply Wall St -

How Automatic Data Processing Inc (NASDAQ:ADP) Delivered A Better ROE Than Its Industry

and looking to gauge the potential return on investment in Automatic Data Processing Inc (NASDAQ:ADP). … With an ROE of 44.13%, Automatic Data Processing Inc (NASDAQ:ADP) outpaced its own industry which delivered a less exciting 15.08% over the past year. … Sustainability can be gauged by a company’s financial leverage – the more debt it has, the higher ROE is pumped up in the short term, at the expense of long term interest payment burden

Simply Wall St -

Company Info

Description

Automatic Data Processing, Inc. provides business process outsourcing services worldwide. It operates through two segments, Employer Services and Professional Employer Organization (PEO) Services. The Employer Services segment offers various human resources (HR) outsourcing and technology-based human capital management solutions. Its offerings include payroll, benefits administration, talent management, HR management, time and attendance management, insurance, retirement, and compliance services. This segment provides a range of solutions, which businesses of various types and sizes can use to activate talent, as well as recruit, pay, manage, and retain their workforce. It serves approximately 630,000 clients through its cloud-based strategic software as a service offering. The PEO Services segment provides HR outsourcing solutions through a co-employment model. This segment offers HR administration services, including employee recruitment, payroll and tax administration, time and attendance management, benefits administration, employee training and development, online HR management tools, and employee leave administration. It also provides employee benefits that enable eligible worksite employees with access to a 401(k) retirement savings plan, health savings accounts, flexible spending accounts, group term life and disability coverage, and an employee assistance program, as well as group health, dental, and vision coverage. In addition, this segment offers employer liability management services comprising workers’ compensation program, unemployment claims management, safety compliance guidance and access to safety training, access to employment practices liability insurance, and guidance on compliance with the United States federal, state, and local employment laws and regulations. The company was founded in 1949 and is headquartered in Roseland, New Jersey.

Details
Name: Automatic Data Processing, Inc.
ADP
Exchange: NasdaqGS
Founded: 1949
$73,013,889,039
435,228,237
Website: http://www.adp.com
Address: Automatic Data Processing, Inc.
One ADP Boulevard,
Roseland,
New Jersey, 07068,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NasdaqGS ADP Common Stock Nasdaq Global Select US USD 02. Jan 1968
DB ADP Common Stock Deutsche Boerse AG DE EUR 02. Jan 1968
LSE 0HJI Common Stock London Stock Exchange GB USD 02. Jan 1968
WBAG ADP Common Stock Wiener Boerse AG AT EUR 02. Jan 1968
SNSE ADP Common Stock Santiago Stock Exchange CL USD 02. Jan 1968
BOVESPA ADPR34 BDR EACH REP 0.5 COM USD0.10 Bolsa de Valores de Sao Paulo BR BRL 17. May 2019
Number of employees
Current staff
Staff numbers
57,000
Automatic Data Processing employees.
Industry
Data Processing and Outsourced Services
Software
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/06/24 23:33
End of day share price update: 2019/06/24 00:00
Last estimates confirmation: 2019/06/14
Last earnings filing: 2019/05/03
Last earnings reported: 2019/03/31
Last annual earnings reported: 2018/06/30


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.