| Snowflake Score | |
|---|---|
| Valuation | 1/6 |
| Future Growth | 2/6 |
| Past Performance | 4/6 |
| Financial Health | 5/6 |
| Dividends | 5/6 |
ADP Stock Overview
Automatic Data Processing, Inc. provides cloud-based human capital management solutions worldwide.
Rewards
Risk Analysis
No risks detected for ADP from our risk checks.
Automatic Data Processing Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$229.89 |
| 52 Week High | US$241.18 |
| 52 Week Low | US$159.31 |
| Beta | 0.78 |
| 1 Month Change | 1.83% |
| 3 Month Change | 10.85% |
| 1 Year Change | 31.52% |
| 3 Year Change | 65.00% |
| 5 Year Change | 134.06% |
| Change since IPO | 3,587.46% |
Recent News & Updates
Is Now The Time To Put Automatic Data Processing (NASDAQ:ADP) On Your Watchlist?
It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks...
We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Automatic Data Processing, Inc.'s (NASDAQ:ADP) CEO For Now
Under the guidance of CEO Carlos Rodriguez, Automatic Data Processing, Inc. ( NASDAQ:ADP ) has performed reasonably...
Automatic Data Processing: Patience Is Warranted Given The Lofty Valuation
ADP is a Dividend Champion with 46 consecutive years of dividend growth. Shares currently yield 1.7%. ADP provides expertise to their clients in payroll and human capital management to allow them to focus on the core issues related to their business. ADP is the largest player in a highly fragmented market which allows them to acquire new clients. ADP's client base has continued to increase despite the pandemic headwinds climbing from 810k+ to 860k+ to 910k+ over the last 3 years. Lofty valuation has lower future return expectations. Patience is warranted at this time.
Shareholder Returns
| ADP | US IT | US Market | |
|---|---|---|---|
| 7D | 0.1% | -3.8% | -2.7% |
| 1Y | 31.5% | -2.4% | 16.6% |
Return vs Industry: ADP exceeded the US IT industry which returned 1.7% over the past year.
Return vs Market: ADP exceeded the US Market which returned 19.4% over the past year.
Price Volatility
| ADP volatility | |
|---|---|
| ADP Average Weekly Movement | 2.5% |
| IT Industry Average Movement | 7.3% |
| Market Average Movement | 6.1% |
| 10% most volatile stocks in US Market | 14.8% |
| 10% least volatile stocks in US Market | 2.4% |
Stable Share Price: ADP is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 2% a week.
Volatility Over Time: ADP's weekly volatility (2%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1949 | 56,000 | Carlos Rodriguez | https://www.adp.com |
Automatic Data Processing, Inc. provides cloud-based human capital management solutions worldwide. It operates in two segments, Employer Services and Professional Employer Organization (PEO). The Employer Services segment offers strategic, cloud-based platforms, and human resources (HR) outsourcing solutions.
Automatic Data Processing Fundamentals Summary
| ADP fundamental statistics | |
|---|---|
| Market Cap | US$96.87b |
| Earnings (TTM) | US$2.70b |
| Revenue (TTM) | US$15.37b |
35.9x
P/E Ratio6.3x
P/S RatioIs ADP overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| ADP income statement (TTM) | |
|---|---|
| Revenue | US$15.37b |
| Cost of Revenue | US$8.43b |
| Gross Profit | US$6.94b |
| Expenses | US$4.24b |
| Earnings | US$2.70b |
Last Reported Earnings
Sep 30, 2021
Next Earnings Date
n/a
| Earnings per share (EPS) | 6.40 |
| Gross Margin | 45.17% |
| Net Profit Margin | 17.55% |
| Debt/Equity Ratio | 56.7% |
How did ADP perform over the long term?
See historical performance and comparisonDividends
1.8%
Current Dividend Yield59%
Payout RatioDoes ADP pay a reliable dividends?
See ADP dividend history and benchmarks| Automatic Data Processing dividend dates | |
|---|---|
| Ex Dividend Date | Dec 09 2021 |
| Dividend Pay Date | Jan 01 2022 |
| Days until Ex dividend | 4 days |
| Days until Dividend pay date | 27 days |
Does ADP pay a reliable dividends?
See ADP dividend history and benchmarksValuation
Is Automatic Data Processing undervalued compared to its fair value and its price relative to the market?
2.5%
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: ADP ($229.89) is trading below our estimate of fair value ($235.88)
Significantly Below Fair Value: ADP is trading below fair value, but not by a significant amount.
Price To Earnings Ratio
PE vs Industry: ADP is poor value based on its PE Ratio (35.9x) compared to the US IT industry average (34.9x).
PE vs Market: ADP is poor value based on its PE Ratio (35.9x) compared to the US market (16.9x).
Price to Earnings Growth Ratio
PEG Ratio: ADP is poor value based on its PEG Ratio (4.6x)
Price to Book Ratio
PB vs Industry: ADP is overvalued based on its PB Ratio (18.1x) compared to the US IT industry average (4.7x).
Future Growth
How is Automatic Data Processing forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?
7.9%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: ADP's forecast earnings growth (7.9% per year) is above the savings rate (2%).
Earnings vs Market: ADP's earnings (7.9% per year) are forecast to grow slower than the US market (14.1% per year).
High Growth Earnings: ADP's earnings are forecast to grow, but not significantly.
Revenue vs Market: ADP's revenue (6% per year) is forecast to grow slower than the US market (10% per year).
High Growth Revenue: ADP's revenue (6% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: ADP's Return on Equity is forecast to be very high in 3 years time (54.2%).
Past Performance
How has Automatic Data Processing performed over the past 5 years?
10.3%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: ADP has high quality earnings.
Growing Profit Margin: ADP's current net profit margins (17.5%) are higher than last year (17.1%).
Past Earnings Growth Analysis
Earnings Trend: ADP's earnings have grown by 10.3% per year over the past 5 years.
Accelerating Growth: ADP's earnings growth over the past year (8.5%) is below its 5-year average (10.3% per year).
Earnings vs Industry: ADP earnings growth over the past year (8.5%) underperformed the IT industry 38.3%.
Return on Equity
High ROE: ADP's Return on Equity (50.4%) is considered outstanding.
Financial Health
How is Automatic Data Processing's financial position?
Financial Position Analysis
Short Term Liabilities: ADP's short term assets ($52.0B) exceed its short term liabilities ($49.7B).
Long Term Liabilities: ADP's short term assets ($52.0B) exceed its long term liabilities ($5.0B).
Debt to Equity History and Analysis
Debt Level: ADP's net debt to equity ratio (25.3%) is considered satisfactory.
Reducing Debt: ADP's debt to equity ratio has increased from 47.3% to 56.7% over the past 5 years.
Debt Coverage: ADP's debt is well covered by operating cash flow (90.1%).
Interest Coverage: ADP's interest payments on its debt are well covered by EBIT (113.8x coverage).
Balance Sheet
Dividend
What is Automatic Data Processing current dividend yield, its reliability and sustainability?
1.81%
Current Dividend Yield
Upcoming Dividend Payment
Dividend Yield vs Market
Notable Dividend: ADP's dividend (1.81%) is higher than the bottom 25% of dividend payers in the US market (1.35%).
High Dividend: ADP's dividend (1.81%) is low compared to the top 25% of dividend payers in the US market (3.61%).
Stability and Growth of Payments
Stable Dividend: ADP's dividends per share have been stable in the past 10 years.
Growing Dividend: ADP's dividend payments have increased over the past 10 years.
Current Payout to Shareholders
Dividend Coverage: With its reasonable payout ratio (58.6%), ADP's dividend payments are covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: ADP's dividends in 3 years are forecast to be covered by earnings (55% payout ratio).
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
2.6yrs
Average management tenure
CEO
Carlos Rodriguez (57 yo)
10.08yrs
Tenure
US$16,985,259
Compensation
Mr. Carlos A. Rodriguez serves as Independent Director at Microsoft Corporation since November 30, 2021. He has been the Chief Executive Officer of Automatic Data Processing, Inc. since November 8, 2011 an...
CEO Compensation Analysis
Compensation vs Market: Carlos's total compensation ($USD16.99M) is above average for companies of similar size in the US market ($USD11.16M).
Compensation vs Earnings: Carlos's compensation has been consistent with company performance over the past year.
Leadership Team
Experienced Management: ADP's management team is considered experienced (2.6 years average tenure).
Board Members
Experienced Board: ADP's board of directors are considered experienced (5.5 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
Company Information
Automatic Data Processing, Inc.'s employee growth, exchange listings and data sources
Key Information
- Name: Automatic Data Processing, Inc.
- Ticker: ADP
- Exchange: NasdaqGS
- Founded: 1949
- Industry: Data Processing and Outsourced Services
- Sector: Software
- Market Cap: US$96.872b
- Shares outstanding: 421.38m
- Website: https://www.adp.com
Number of Employees
Location
- Automatic Data Processing, Inc.
- One ADP Boulevard
- Roseland
- New Jersey
- 7068
- United States
Listings
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2021/12/03 23:52 |
| End of Day Share Price | 2021/12/03 00:00 |
| Earnings | 2021/09/30 |
| Annual Earnings | 2021/06/30 |
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.