Automatic Data Processing
Market Cap
US$78.3b
Last Updated
2020/02/16 23:31 UTC
Data Sources
Company Financials +
Executive Summary
Automatic Data Processing, Inc. provides cloud-based human capital management solutions worldwide.
Rewards
Risk Analysis
No risks detected for ADP from our risk checks.
Snowflake Analysis
Outstanding track record with excellent balance sheet and pays a dividend.
Similar Companies
Share Price & News
How has Automatic Data Processing's share price performed over time and what events caused price changes?
Latest Share Price and Events
Stable Share Price: ADP has not had significant price volatility in the past 3 months.
Market Performance
7 Day Return
1.2%
ADP
2.1%
US IT
1.5%
US Market
1 Year Return
21.1%
ADP
37.2%
US IT
20.1%
US Market
Return vs Industry: ADP underperformed the US IT industry which returned 37.2% over the past year.
Return vs Market: ADP matched the US Market which returned 20.1% over the past year.
Shareholder returns
| ADP | Industry | Market | |
|---|---|---|---|
| 7 Day | 1.2% | 2.1% | 1.5% |
| 30 Day | 2.5% | 4.4% | 1.4% |
| 90 Day | 6.2% | 13.9% | 8.7% |
| 1 Year | 23.6%21.1% | 38.6%37.2% | 22.7%20.1% |
| 3 Year | 93.7%81.8% | 112.3%103.1% | 50.1%40.5% |
| 5 Year | 128.5%104.4% | 148.0%125.8% | 73.1%54.1% |
Price Volatility Vs. Market
How volatile is Automatic Data Processing's share price compared to the market and industry in the last 5 years?
Simply Wall St News
5 days ago | Simply Wall St
Shareholders Are Thrilled That The Automatic Data Processing (NASDAQ:ADP) Share Price Increased 106%2 weeks ago | Simply Wall St
Automatic Data Processing, Inc. Just Reported Second-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?2 weeks ago | Simply Wall St
Is Automatic Data Processing, Inc. (NASDAQ:ADP) The Right Choice For A Smart Dividend Investor?Valuation
Is Automatic Data Processing undervalued compared to its fair value and its price relative to the market?
31.86x
Price to Earnings (PE) ratio
Share Price vs. Fair Value
Below Fair Value: ADP ($181.25) is trading above our estimate of fair value ($156.89)
Significantly Below Fair Value: ADP is trading above our estimate of fair value.
Price To Earnings Ratio
PE vs Industry: ADP is good value based on its PE Ratio (31.9x) compared to the IT industry average (33.1x).
PE vs Market: ADP is poor value based on its PE Ratio (31.9x) compared to the US market (18.4x).
Price to Earnings Growth Ratio
PEG Ratio: ADP is poor value based on its PEG Ratio (2.9x)
Price to Book Ratio
PB vs Industry: ADP is overvalued based on its PB Ratio (14.6x) compared to the US IT industry average (4.3x).
Next Steps
Future Growth
How is Automatic Data Processing forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?
10.9%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: ADP's forecast earnings growth (10.9% per year) is above the savings rate (1.7%).
Earnings vs Market: ADP's earnings (10.9% per year) are forecast to grow slower than the US market (14.5% per year).
High Growth Earnings: ADP's earnings are forecast to grow, but not significantly.
Revenue vs Market: ADP's revenue (6.3% per year) is forecast to grow slower than the US market (7.6% per year).
High Growth Revenue: ADP's revenue (6.3% 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 (40.2%).
Next Steps
Past Performance
How has Automatic Data Processing performed over the past 5 years?
12.0%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: ADP has high quality earnings.
Growing Profit Margin: ADP's current net profit margins (16.9%) are higher than last year (13.5%).
Past Earnings Growth Analysis
Earnings Trend: ADP's earnings have grown by 12% per year over the past 5 years.
Accelerating Growth: ADP's earnings growth over the past year (32%) exceeds its 5-year average (12% per year).
Earnings vs Industry: ADP earnings growth over the past year (32%) exceeded the IT industry 12%.
Return on Equity
High ROE: ADP's Return on Equity (45.9%) is considered outstanding.
Return on Assets
Return on Capital Employed
Next Steps
Financial Health
How is Automatic Data Processing's financial position?
Financial Position Analysis
Short Term Liabilities: ADP's short term assets ($41.4B) exceed its short term liabilities ($40.5B).
Long Term Liabilities: ADP's short term assets ($41.4B) exceed its long term liabilities ($3.2B).
Debt to Equity History and Analysis
Debt Level: ADP's debt to equity ratio (37.4%) is considered satisfactory.
Reducing Debt: ADP's debt to equity ratio has increased from 0.2% to 37.4% over the past 5 years.
Debt Coverage: ADP's debt is well covered by operating cash flow (144.1%).
Interest Coverage: ADP's interest payments on its debt are well covered by EBIT (115.2x coverage).
Balance Sheet
Inventory Level: ADP has a low level of unsold assets or inventory.
Debt Coverage by Assets: ADP's debt is covered by short term assets (assets are 20.6x debt).
Next Steps
Dividend
What is Automatic Data Processing's current dividend yield, its reliability and sustainability?
2.01%
Current Dividend Yield
Upcoming Dividend Payment
Purchase Automatic Data Processing before the 'Buy Limit' to receive their next dividend payment.
Dividend Yield vs Market
Current dividend yield vs market & industry
Notable Dividend: ADP's dividend (2.01%) is higher than the bottom 25% of dividend payers in the US market (1.44%).
High Dividend: ADP's dividend (2.01%) is low compared to the top 25% of dividend payers in the US market (3.69%).
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 (57.7%), 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 (51.3% payout ratio).
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
3.1yrs
Average management tenure
CEO
Carlos Rodriguez (55yo)
8.3yrs
Tenure
US$19,000,187
Compensation
Mr. Carlos A. Rodriguez has been the Chief Executive Officer of Automatic Data Processing, Inc. since November 8, 2011 and has been its President since May 2011. Mr. Rodriguez served as the Chief Operating ...
CEO Compensation Analysis
Compensation vs Market: Carlos's total compensation ($USD19.00M) is above average for companies of similar size in the US market ($USD10.81M).
Compensation vs Earnings: Carlos's compensation has increased by more than 20% in the past year.
Leadership Team
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| CEO, President & Director | 8.3yrs | US$19.00m | 0.022% $17.5m | |
| Corporate Vice President & CFO | 0.8yrs | US$2.13m | 0.0016% $1.2m | |
| Corporate VP | 9.6yrs | US$4.40m | 0.010% $8.2m | |
| President of Worldwide Sales & Marketing | 3.1yrs | US$3.77m | 0.0040% $3.1m | |
| President of Small Business Solutions & Human Resources Outsourcing | 3.1yrs | US$3.75m | 0.0040% $3.2m | |
| Corporate Controller & Principal Accounting Officer | 4.9yrs | no data | 0.00086% $673.0k | |
| Corporate Vice President of Global Product & Technology | 1.6yrs | no data | 0.0056% $4.4m | |
| Global Chief Information Officer | 0yrs | no data | no data | |
| Vice President of Investor Relation | 4.1yrs | no data | no data | |
| President of Compliance Solutions | 2.1yrs | no data | 0.0053% $4.2m |
3.1yrs
Average Tenure
50.5yo
Average Age
Experienced Management: ADP's management team is considered experienced (3.1 years average tenure).
Board Members
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| CEO, President & Director | 8.3yrs | US$19.00m | 0.022% $17.5m | |
| Independent Director | 12.4yrs | US$318.50k | no data | |
| Non-Executive Chairman of the Board | 4.3yrs | US$500.00k | 0.013% $9.9m | |
| Independent Director | 8.4yrs | US$335.00k | 0.0067% $5.2m | |
| Independent Director | 3.7yrs | US$335.00k | 0.0026% $2.0m | |
| Independent Director | 1.8yrs | US$300.00k | 0.0016% $1.2m | |
| Independent Director | 6.1yrs | US$355.00k | no data | |
| Independent Director | 11yrs | US$325.00k | 0.00048% $375.6k | |
| Independent Director | 16.1yrs | US$320.00k | 0.00023% $180.0k | |
| Independent Director | 4.5yrs | US$320.00k | 0.0031% $2.4m |
7.2yrs
Average Tenure
62.5yo
Average Age
Experienced Board: ADP's board of directors are considered experienced (7.2 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.
Ownership Breakdown
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
Company Information
Automatic Data Processing, Inc.'s company bio, 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$78.255b
- Shares outstanding: 431.75m
- Website: https://www.adp.com
Number of Employees
Location
- Automatic Data Processing, Inc.
- One ADP Boulevard
- Roseland
- New Jersey
- 7068
- United States
Listings
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| ADP | NasdaqGS (Nasdaq Global Select) | Yes | Common Stock | US | USD | Jan 1968 |
| ADP | DB (Deutsche Boerse AG) | Yes | Common Stock | DE | EUR | Jan 1968 |
| ADP | SNSE (Santiago Stock Exchange) | Yes | Common Stock | CL | USD | Jan 1968 |
| ADP | WBAG (Wiener Boerse AG) | Yes | Common Stock | AT | EUR | Jan 1968 |
| 0HJI | LSE (London Stock Exchange) | Yes | Common Stock | GB | USD | Jan 1968 |
| ADP | ETLX (Eurotlx) | Yes | Common Stock | IT | EUR | Jan 1968 |
| ADPR34 | BOVESPA (Bolsa de Valores de Sao Paulo) | BDR EACH REP 0.5 COM USD0.10 | BR | BRL | May 2019 |
Biography
Automatic Data Processing, Inc. provides cloud-based human capital management solutions worldwide. It operates through two segments, Employer Services and Professional Employer Organization (PEO) Services. The Employer Services segment offers strategic, cloud-based platforms, and human resources (HR) outsourcing solutions. Its offerings include payroll, benefits administration, talent management, HR management, workforce management, insurance, retirement, and compliance services. The PEO Services segment provides HR outsourcing solutions through a co-employment model. This segment offers protection and compliance, talent engagement, comprehensive outsourcing, and recruitment process outsourcing services. The company was founded in 1949 and is headquartered in Roseland, New Jersey.
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2020/02/16 23:31 |
| End of Day Share Price | 2020/02/14 00:00 |
| Earnings | 2019/12/31 |
| Annual Earnings | 2019/06/30 |
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.