AUTOMATIC DATA PROCESSING (NASDAQ:ADP) Exhibits Quality Stock Traits. Here's Why.

In this article we will dive into AUTOMATIC DATA PROCESSING (NASDAQ:ADP) as a possible candidate for quality investing. Investors should always do their own research, but we noticed AUTOMATIC DATA PROCESSING showing up in our Caviar Cruise quality screen, which makes it worth to investigate a bit more.

Some of the quality metrics of NASDAQ:ADP highlighted

• Over the past 5 years, AUTOMATIC DATA PROCESSING has experienced impressive revenue growth, with 6.36% increase. This demonstrates the company's ability to effectively expand its top line and suggests a positive outlook for future revenue generation.
• With a robust ROIC excluding cash and goodwill at 114.0%, AUTOMATIC DATA PROCESSING showcases its effective allocation of capital and operational excellence. This metric signifies the company's ability to generate attractive returns and supports its long-term financial performance.
• The Debt/Free Cash Flow Ratio of AUTOMATIC DATA PROCESSING stands at 2.05, 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.
• With a robust Profit Quality (5-year) ratio of 97.19%, AUTOMATIC DATA PROCESSING highlights its ability to consistently generate high-quality profits. This metric reflects the company's effective management and operational excellence in delivering reliable earnings over the long term.
• AUTOMATIC DATA PROCESSING has experienced impressive EBIT growth over the past 5 years, with 10.53% increase. This reflects the company's effective operational performance and highlights its potential for long-term financial success.
• 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.

How does the complete fundamental picture look for 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.

Overall ADP gets a fundamental rating of 6 out of 10. We evaluated ADP against 81 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.

For an up to date full fundamental analysis you can check the fundamental report of ADP

Our Caviar Cruise screen will find you more ideas suited for quality investing.

Disclaimer

This article should in no way be interpreted as advice. 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.