258.84 USD
+0.74 (+0.29%)
258.84 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to ADP. ADP was compared to 86 industry peers in the Professional Services industry. ADP has an excellent profitability rating, but there are some minor concerns on its financial health. ADP has a expensive valuation and it also scores bad on growth. Finally ADP also has an excellent dividend rating. These ratings could make ADP a good candidate for dividend investing.
1. Profitability
1.1 Basic Checks
In the past year ADP was profitable.
In the past year ADP had a positive cash flow from operations.
In the past 5 years ADP has always been profitable.
ADP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 7.61%, ADP is doing good in the industry, outperforming 73.26% of the companies in the same industry.
With an excellent Return On Equity value of 64.90%, ADP belongs to the best of the industry, outperforming 95.35% of the companies in the same industry.
The Return On Invested Capital of ADP (24.00%) is better than 93.02% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ADP is significantly above the industry average of 12.04%.
The last Return On Invested Capital (24.00%) for ADP is well below the 3 year average (36.13%), which needs to be investigated, but indicates that ADP had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.61% | ||
| ROE | 64.9% | ||
| ROIC | 24% |
ROA(3y)7.08%
ROA(5y)6.25%
ROE(3y)81.89%
ROE(5y)76.59%
ROIC(3y)36.13%
ROIC(5y)33.86%
1.3 Margins
ADP's Profit Margin of 19.79% is amongst the best of the industry. ADP outperforms 87.21% of its industry peers.
In the last couple of years the Profit Margin of ADP has grown nicely.
ADP has a better Operating Margin (26.27%) than 91.86% of its industry peers.
In the last couple of years the Operating Margin of ADP has grown nicely.
ADP has a better Gross Margin (47.26%) than 61.63% of its industry peers.
ADP's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.27% | ||
| PM (TTM) | 19.79% | ||
| GM | 47.26% |
OM growth 3Y4.64%
OM growth 5Y4.17%
PM growth 3Y3.54%
PM growth 5Y3.25%
GM growth 3Y2.58%
GM growth 5Y1.81%
2. Health
2.1 Basic Checks
ADP has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, ADP has less shares outstanding
Compared to 5 years ago, ADP has less shares outstanding
ADP has a worse debt/assets ratio than last year.
2.2 Solvency
ADP has an Altman-Z score of 2.74. This is not the best score and indicates that ADP is in the grey zone with still only limited risk for bankruptcy at the moment.
ADP has a Altman-Z score (2.74) which is in line with its industry peers.
The Debt to FCF ratio of ADP is 2.18, which is a good value as it means it would take ADP, 2.18 years of fcf income to pay off all of its debts.
ADP's Debt to FCF ratio of 2.18 is fine compared to the rest of the industry. ADP outperforms 70.93% of its industry peers.
ADP has a Debt/Equity ratio of 1.44. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.44, ADP is doing worse than 75.58% of the companies in the same industry.
Although ADP does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.44 | ||
| Debt/FCF | 2.18 | ||
| Altman-Z | 2.74 |
ROIC/WACC2.78
WACC8.62%
2.3 Liquidity
A Current Ratio of 1.05 indicates that ADP should not have too much problems paying its short term obligations.
ADP has a worse Current ratio (1.05) than 73.26% of its industry peers.
ADP has a Quick Ratio of 1.05. This is a normal value and indicates that ADP is financially healthy and should not expect problems in meeting its short term obligations.
ADP has a worse Quick ratio (1.05) than 73.26% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.05 | ||
| Quick Ratio | 1.05 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.74% over the past year.
Measured over the past years, ADP shows a quite strong growth in Earnings Per Share. The EPS has been growing by 11.05% on average per year.
The Revenue has been growing slightly by 7.07% in the past year.
The Revenue has been growing slightly by 7.10% on average over the past years.
EPS 1Y (TTM)7.74%
EPS 3Y12.57%
EPS 5Y11.05%
EPS Q2Q%6.87%
Revenue 1Y (TTM)7.07%
Revenue growth 3Y7.61%
Revenue growth 5Y7.1%
Sales Q2Q%7.09%
3.2 Future
ADP is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.81% yearly.
The Revenue is expected to grow by 5.68% on average over the next years.
EPS Next Y10.23%
EPS Next 2Y9.83%
EPS Next 3Y9.55%
EPS Next 5Y7.81%
Revenue Next Year6.24%
Revenue Next 2Y6.01%
Revenue Next 3Y5.97%
Revenue Next 5Y5.68%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 25.48 indicates a quite expensive valuation of ADP.
Compared to the rest of the industry, the Price/Earnings ratio of ADP is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 26.57. ADP is around the same levels.
A Price/Forward Earnings ratio of 21.46 indicates a rather expensive valuation of ADP.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ADP is on the same level as its industry peers.
ADP is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 24.04, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.48 | ||
| Fwd PE | 21.46 |
4.2 Price Multiples
ADP's Enterprise Value to EBITDA ratio is in line with the industry average.
63.95% of the companies in the same industry are more expensive than ADP, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.87 | ||
| EV/EBITDA | 15.61 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ADP does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of ADP may justify a higher PE ratio.
PEG (NY)2.49
PEG (5Y)2.3
EPS Next 2Y9.83%
EPS Next 3Y9.55%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.61%, ADP has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.52, ADP pays a better dividend. On top of this ADP pays more dividend than 84.88% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 1.88, ADP pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.61% |
5.2 History
The dividend of ADP is nicely growing with an annual growth rate of 11.62%!
ADP has paid a dividend for at least 10 years, which is a reliable track record.
ADP has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)11.62%
Div Incr Years26
Div Non Decr Years26
5.3 Sustainability
59.30% of the earnings are spent on dividend by ADP. This is a bit on the high side, but may be sustainable.
The dividend of ADP is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP59.3%
EPS Next 2Y9.83%
EPS Next 3Y9.55%
258.84
+0.74 (+0.29%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners86.7%
Inst Owner Change-0.39%
Ins Owners0.1%
Ins Owner Change3.33%
Market Cap104.69B
Revenue(TTM)20.90B
Net Income(TTM)4.14B
Analysts65.71
Price Target297.42 (14.9%)
Short Float %1.89%
Short Ratio3.67
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.61% |
Yearly Dividend5.9
Dividend Growth(5Y)11.62%
DP59.3%
Div Incr Years26
Div Non Decr Years26
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)0.73%
Min EPS beat(2)0.35%
Max EPS beat(2)1.1%
EPS beat(4)4
Avg EPS beat(4)1.2%
Min EPS beat(4)0.35%
Max EPS beat(4)1.85%
EPS beat(8)8
Avg EPS beat(8)1.6%
EPS beat(12)12
Avg EPS beat(12)1.57%
EPS beat(16)16
Avg EPS beat(16)1.79%
Revenue beat(2)1
Avg Revenue beat(2)0.21%
Min Revenue beat(2)-0.23%
Max Revenue beat(2)0.64%
Revenue beat(4)3
Avg Revenue beat(4)0.27%
Min Revenue beat(4)-0.23%
Max Revenue beat(4)0.64%
Revenue beat(8)4
Avg Revenue beat(8)-0.04%
Revenue beat(12)6
Avg Revenue beat(12)-0.09%
Revenue beat(16)10
Avg Revenue beat(16)0.04%
PT rev (1m)-5.79%
PT rev (3m)-8.52%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.02%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.07%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)-0.39%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.03%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.48 | ||
| Fwd PE | 21.46 | ||
| P/S | 5.01 | ||
| P/FCF | 24.87 | ||
| P/OCF | 22 | ||
| P/B | 16.42 | ||
| P/tB | 69.76 | ||
| EV/EBITDA | 15.61 |
EPS(TTM)10.16
EY3.93%
EPS(NY)12.06
Fwd EY4.66%
FCF(TTM)10.41
FCFY4.02%
OCF(TTM)11.76
OCFY4.54%
SpS51.68
BVpS15.76
TBVpS3.71
PEG (NY)2.49
PEG (5Y)2.3
Graham Number60.02
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.61% | ||
| ROE | 64.9% | ||
| ROCE | 44.33% | ||
| ROIC | 24% | ||
| ROICexc | 43.76% | ||
| ROICexgc | 88.38% | ||
| OM | 26.27% | ||
| PM (TTM) | 19.79% | ||
| GM | 47.26% | ||
| FCFM | 20.14% |
ROA(3y)7.08%
ROA(5y)6.25%
ROE(3y)81.89%
ROE(5y)76.59%
ROIC(3y)36.13%
ROIC(5y)33.86%
ROICexc(3y)55.75%
ROICexc(5y)48.87%
ROICexgc(3y)137.09%
ROICexgc(5y)114.46%
ROCE(3y)51.2%
ROCE(5y)46.57%
ROICexgc growth 3Y-1.22%
ROICexgc growth 5Y8.54%
ROICexc growth 3Y0.6%
ROICexc growth 5Y6.46%
OM growth 3Y4.64%
OM growth 5Y4.17%
PM growth 3Y3.54%
PM growth 5Y3.25%
GM growth 3Y2.58%
GM growth 5Y1.81%
F-Score6
Asset Turnover0.38
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.44 | ||
| Debt/FCF | 2.18 | ||
| Debt/EBITDA | 1.51 | ||
| Cap/Depr | 92.82% | ||
| Cap/Sales | 2.62% | ||
| Interest Coverage | 13.19 | ||
| Cash Conversion | 78.22% | ||
| Profit Quality | 101.77% | ||
| Current Ratio | 1.05 | ||
| Quick Ratio | 1.05 | ||
| Altman-Z | 2.74 |
F-Score6
WACC8.62%
ROIC/WACC2.78
Cap/Depr(3y)99.42%
Cap/Depr(5y)100.95%
Cap/Sales(3y)2.92%
Cap/Sales(5y)3.1%
Profit Quality(3y)103.34%
Profit Quality(5y)99.19%
High Growth Momentum
Growth
EPS 1Y (TTM)7.74%
EPS 3Y12.57%
EPS 5Y11.05%
EPS Q2Q%6.87%
EPS Next Y10.23%
EPS Next 2Y9.83%
EPS Next 3Y9.55%
EPS Next 5Y7.81%
Revenue 1Y (TTM)7.07%
Revenue growth 3Y7.61%
Revenue growth 5Y7.1%
Sales Q2Q%7.09%
Revenue Next Year6.24%
Revenue Next 2Y6.01%
Revenue Next 3Y5.97%
Revenue Next 5Y5.68%
EBIT growth 1Y6.75%
EBIT growth 3Y12.61%
EBIT growth 5Y11.57%
EBIT Next Year18.67%
EBIT Next 3Y11.07%
EBIT Next 5Y10.37%
FCF growth 1Y29.53%
FCF growth 3Y19.94%
FCF growth 5Y12.76%
OCF growth 1Y24.68%
OCF growth 3Y16.81%
OCF growth 5Y10.3%
AUTOMATIC DATA PROCESSING / ADP FAQ
Can you provide the ChartMill fundamental rating for AUTOMATIC DATA PROCESSING?
ChartMill assigns a fundamental rating of 6 / 10 to ADP.
What is the valuation status of AUTOMATIC DATA PROCESSING (ADP) stock?
ChartMill assigns a valuation rating of 3 / 10 to AUTOMATIC DATA PROCESSING (ADP). This can be considered as Overvalued.
What is the profitability of ADP stock?
AUTOMATIC DATA PROCESSING (ADP) has a profitability rating of 9 / 10.
Can you provide the financial health for ADP stock?
The financial health rating of AUTOMATIC DATA PROCESSING (ADP) is 5 / 10.
Is the dividend of AUTOMATIC DATA PROCESSING sustainable?
The dividend rating of AUTOMATIC DATA PROCESSING (ADP) is 7 / 10 and the dividend payout ratio is 59.3%.