Why the quality investor may take a look at AUTOMATIC DATA PROCESSING (NASDAQ:ADP).

Quality investors are looking for the best of the best. Companies which are growing steadily and consistently, but are also in excellent financial condition. We will have a look here to see if AUTOMATIC DATA PROCESSING (NASDAQ:ADP) is suited for quality investing. Investors should of couse do their own research, but we spotted AUTOMATIC DATA PROCESSING showing up in our Caviar Cruise quality screen, so it may be worth spending some more time on it.

Some of the quality metrics of NASDAQ:ADP highlighted

• AUTOMATIC DATA PROCESSING has shown strong performance in revenue growth over the past 5 years, with a 6.3% increase. This indicates the company's ability to generate consistent revenue growth and reflects its potential for long-term success.
• AUTOMATIC DATA PROCESSING demonstrates impressive performance in terms of ROIC excluding cash and goodwill, with a 144.0% ratio. This highlights the company's efficient utilization of capital and its focus on maximizing returns for investors.
• The Debt/Free Cash Flow Ratio of AUTOMATIC DATA PROCESSING stands at 0.82, reflecting the company's prudent capital structure and cash flow dynamics. This ratio highlights the company's ability to generate robust free cash flow relative to its debt obligations.
• The Profit Quality (5-year) of AUTOMATIC DATA PROCESSING stands at 96.54%, highlighting its ability to consistently generate reliable profits. This metric underscores the company's strong business fundamentals and reinforces its position as a financially stable entity.
• The 5-year EBIT growth of AUTOMATIC DATA PROCESSING has been remarkable, with 12.01% increase. This demonstrates the company's ability to improve its operational efficiency and indicates its competitiveness within the market.
• AUTOMATIC DATA PROCESSING demonstrates a remarkable trend where its EBIT 5-year growth exceeds its Revenue 5-year growth. This indicates the company's ability to enhance its profitability through improved cost control and operational efficiency.

What else is there to say on the fundamentals of NASDAQ:ADP?

Every day, ChartMill assigns a Fundamental Rating to each stock, providing a score ranging from 0 to 10. This rating is determined by evaluating various fundamental indicators and properties.

Taking everything into account, ADP scores 6 out of 10 in our fundamental rating. ADP was compared to 77 industry peers in the Professional Services industry. ADP scores excellent on profitability, but there are some minor concerns on its financial health. While showing a medium growth rate, ADP is valued expensive at the moment.

Our latest full fundamental report of ADP contains the most current fundamental analsysis.

More quality stocks can be found in our Caviar Cruise screen.

Disclaimer

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.