Dividend Overview
Dividend Yield
2.91%
Dividend / Share
$5.93
Automatic Data Processing Inc
Exchange: NASDAQSector: IndustrialsIndustry: Staffing & Employment Services
Automatic Data Processing, Inc. (ADP) is a provider of business outsourcing solutions. ADP offers a wide range of human resource, payroll, tax and benefits administration solutions from a single source. ADP is also a provider of integrated computing solutions to auto, truck, motorcycle, marine, recreational vehicle, and heavy equipment dealers throughout the world. The Company's operating segments include: Employer Services, professional employer organization (PEO) Services, and Dealer Services. In October 2011, the Company acquired WALLACE - The Training Tax Credit Company. In January 2012, the Company acquired Indian payroll business of Randstad Holding NV. In April 2012, it acquired the human resource solutions subsidiary of SHPS, Inc. In June 2013, Automatic Data Processing, Inc. announced that it has acquired Payroll S.A.
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Trading 34% below its estimated fair value of $273.50.
Current Price
$204.01
+1.36%GoodMoat Value
$273.50
34.1% undervaluedProfile
Valuation (TTM)
Market Cap$82.51B
P/E19.48
EV$86.72B
P/B13.33
Shares Out404.45M
P/Sales3.89
Revenue$21.21B
EV/EBITDA12.91
Automatic Data Processing Inc (ADP) Dividends
GoodMoat Analysis
ADP's dividend profile is highly favourable for an income-focused value investor. The dividend is well-covered by strong and growing free cash flow, supported by a high-quality business with a robust balance sheet. The company has a long history of consistent dividend growth, enhancing its appeal.
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Automatic Data Processing Inc. presents a compelling dividend profile anchored by exceptional financial quality. The sustainability is excellent, with a payout ratio estimated near 57% based on the provided EPS of $9.98 and a dividend yield of 2.93%. This is comfortably below the typical threshold of 75-80% that signals safety. The 2.93% yield is attractive compared to the broader Industrials sector average, which often sits closer to 1.5-2.0%. More importantly, the dividend is backed by strong free cash flow generation, with an FCF yield of 5.4% indicating the payout consumes only about half of the cash produced, providing a significant margin of safety for future increases. This aligns with the 'Strong' rating for Free Cash Flow in the GoodMoat framework, which favours a margin >10-15%. The company has a demonstrated history of growing its dividend, a trend supported by its financial strength. While the Debt/Equity ratio of 1.47 appears elevated, it is typical for a capital-light, cash-generative business model like ADP's, and the high ROE of 68.4% and consistent profitability suggest the balance sheet is being managed effectively to support shareholder returns. For an income investor, the combination of a secure, growing yield from a high-quality business is a favourable finding. Analysis based on data as of 2024-05-15.
Key Metrics
Market Cap
$82.51B
P/E Ratio
19.48
Forward P/E
—
EPS
$9.98
PEG Ratio
1.70
Book Value
$15.30
Dividend Yield
2.91%
Profit Margin
19.96%
ROE
68.44%
Dividend History
Dividend Safety
ADP Dividend Analysis
Automatic Data Processing Inc (ADP) dividend analysis including yield, payout history, and sustainability metrics. The current dividend yield is 2.91%. The annual dividend per share is $5.93.
P/E ratio: 19.48. Profit margin: 19.96%. Free cash flow: $4.40B. This page shows Automatic Data Processing Inc's dividend overview, key metrics, historical payout data, and dividend safety assessment to help income-focused investors evaluate the sustainability of dividend payments.
GoodMoat's dividend analyzer evaluates payout ratios, earnings coverage, and free cash flow coverage to determine how well supported Automatic Data Processing Inc's dividend payments are. Use this analysis alongside the company's financial statements and quality score to make informed income-investing decisions.