NasdaqGS:ADP

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Automatic Data Processing

Executive Summary

Automatic Data Processing, Inc. provides cloud-based human capital management solutions worldwide. More Details


Snowflake Analysis

Excellent balance sheet established dividend payer.


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

8.4%

ADP

4.5%

US IT

3.9%

US Market


1 Year Return

-10.9%

ADP

27.7%

US IT

18.5%

US Market

Return vs Industry: ADP underperformed the US IT industry which returned 27.6% over the past year.

Return vs Market: ADP underperformed the US Market which returned 17.2% over the past year.


Shareholder returns

ADPIndustryMarket
7 Day8.4%4.5%3.9%
30 Day0.3%-4.6%-4.3%
90 Day-7.3%6.1%8.1%
1 Year-8.8%-10.9%29.1%27.7%21.2%18.5%
3 Year33.7%25.2%96.4%88.8%38.2%29.0%
5 Year86.6%66.8%158.1%136.9%84.3%63.4%

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

Valuation

Is Automatic Data Processing undervalued compared to its fair value and its price relative to the market?

24.36x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ADP ($139.49) is trading above our estimate of fair value ($120.86)

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 (24.4x) compared to the US IT industry average (32x).

PE vs Market: ADP is poor value based on its PE Ratio (24.4x) compared to the US market (17.9x).


Price to Earnings Growth Ratio

PEG Ratio: ADP is poor value based on its PEG Ratio (4x)


Price to Book Ratio

PB vs Industry: ADP is overvalued based on its PB Ratio (10.4x) compared to the US IT industry average (3.7x).


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?

6.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ADP's forecast earnings growth (6.1% per year) is above the savings rate (2.2%).

Earnings vs Market: ADP's earnings (6.1% per year) are forecast to grow slower than the US market (22.1% per year).

High Growth Earnings: ADP's earnings are forecast to grow, but not significantly.

Revenue vs Market: ADP's revenue (4.3% per year) is forecast to grow slower than the US market (9.9% per year).

High Growth Revenue: ADP's revenue (4.3% 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 (45.1%).


Next Steps

Past Performance

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

12.2%

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 (16.3%).


Past Earnings Growth Analysis

Earnings Trend: ADP's earnings have grown by 12.2% per year over the past 5 years.

Accelerating Growth: ADP's earnings growth over the past year (7.5%) is below its 5-year average (12.2% per year).

Earnings vs Industry: ADP earnings growth over the past year (7.5%) underperformed the IT industry 8.6%.


Return on Equity

High ROE: ADP's Return on Equity (42.9%) is considered outstanding.


Next Steps

Financial Health

How is Automatic Data Processing's financial position?


Financial Position Analysis

Short Term Liabilities: ADP's short term assets ($31.6B) exceed its short term liabilities ($30.1B).

Long Term Liabilities: ADP's short term assets ($31.6B) exceed its long term liabilities ($3.3B).


Debt to Equity History and Analysis

Debt Level: ADP's debt to equity ratio (35.1%) is considered satisfactory.

Reducing Debt: ADP's debt to equity ratio has increased from 1.1% to 35.1% over the past 5 years.

Debt Coverage: ADP's debt is well covered by operating cash flow (149.9%).

Interest Coverage: ADP's interest payments on its debt are well covered by EBIT (145.5x coverage).


Balance Sheet


Next Steps

Dividend

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

2.61%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: ADP's dividend (2.61%) is higher than the bottom 25% of dividend payers in the US market (1.72%).

High Dividend: ADP's dividend (2.61%) is low compared to the top 25% of dividend payers in the US market (4.89%).


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 (61.5%), 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 (64.1% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.7yrs

Average management tenure


CEO

Carlos Rodriguez (56 yo)

8.83yrs

Tenure

US$17,645,648

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 ($USD17.65M) is above average for companies of similar size in the US market ($USD11.35M).

Compensation vs Earnings: Carlos's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Carlos Rodriguez
CEO, President & Director8.83yrsUS$17.65m0.021%
$ 12.8m
Kathleen Winters
Corporate Vice President & CFO1.42yrsUS$4.13m0.0013%
$ 779.5k
Donald Weinstein
Corporate Vice President of Global Product & Technology2.17yrsUS$4.96m0.0088%
$ 5.3m
Maria Black
President of Worldwide Sales & Marketing0.50yrUS$5.64m0.0072%
$ 4.3m
John Ayala
President of Employer Services North America0.50yrUS$6.03m0.0062%
$ 3.7m
Brock Albinson
Corporate Controller & Principal Accounting Officer5.5yrsno data0.0011%
$ 677.5k
Vipul Nagrath
Global Chief Information Officerno datano datano data
Christian Greyenbuhl
Vice President of Investor Relation4.67yrsno datano data
Michael Bonarti
Corporate VP10.17yrsUS$4.40m0.014%
$ 8.4m
Douglas Politi
President of Compliance Solutions2.67yrsno data0.0062%
$ 3.7m
Allyce Hackmann
Senior Director of Public Relationsno datano datano data
Sreenivasa Kutam
Chief Human Resources Officer2.67yrsno data0.00095%
$ 569.6k

2.7yrs

Average Tenure

52yo

Average Age

Experienced Management: ADP's management team is considered experienced (2.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Carlos Rodriguez
CEO, President & Director8.83yrsUS$17.65m0.021%
$ 12.8m
Eric Fast
Independent Director13yrsUS$140.00kno data
John Jones
Independent Non-Executive Chairman of the Board4.83yrsUS$510.00k0%
$ 0
Richard Clark
Independent Director9yrsUS$346.50k0%
$ 0
Thomas Lynch
Independent Director2.42yrsUS$330.00k0.00014%
$ 83.9k
Sandra Wijnberg
Independent Director4.25yrsUS$347.50k0%
$ 0
Scott Powers
Independent Director2.42yrsUS$326.50k0.00034%
$ 203.9k
Michael Gregoire
Independent Director6.67yrsUS$50.00kno data
Linda Gooden
Independent Director11.5yrsUS$100.00k0.00048%
$ 287.8k
William Ready
Independent Director4.67yrsUS$310.00k0%
$ 0
Robert Hubbard
Independent Director16.67yrsUS$330.00k0.00023%
$ 137.9k
Peter Bisson
Independent Director5.08yrsUS$345.00k0%
$ 0

5.9yrs

Average Tenure

63.5yo

Average Age

Experienced Board: ADP's board of directors are considered experienced (5.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: ADP insiders have only sold shares 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 company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Automatic Data Processing, Inc.
  • Ticker: ADP
  • Exchange: NasdaqGS
  • Founded: 1961
  • Industry: Data Processing and Outsourced Services
  • Sector: Software
  • Market Cap: US$59.959b
  • Shares outstanding: 429.85m
  • Website: https://www.adp.com

Number of Employees


Location

  • Automatic Data Processing, Inc.
  • One ADP Boulevard
  • Roseland
  • New Jersey
  • 7068
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ADPNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJan 1968
ADPDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
ADPSNSE (Santiago Stock Exchange)YesCommon StockCLUSDJan 1968
ADPWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1968
0HJILSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
ADPETLX (Eurotlx)YesCommon StockITEURJan 1968
ADPBASE (Buenos Aires Stock Exchange)CEDEAR EACH REP 1/2 ORD USD0.10ARARSDec 2000
ADPR34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 2 REP 1 COMBRBRLMay 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). The Empl ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/09/30 23:38
End of Day Share Price2020/09/30 00:00
Earnings2020/06/30
Annual Earnings2020/06/30


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.