259.57 USD
-0.04 (-0.02%)
259.53 USD
-0.04 (-0.02%)
Taking everything into account, ADP scores 6 out of 10 in our fundamental rating. ADP was compared to 86 industry peers in the Professional Services industry. While ADP belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. ADP does not seem to be growing, but still is valued expensively. 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.
Each year in the past 5 years ADP has been profitable.
In the past 5 years ADP always reported a positive cash flow from operatings.
1.2 Ratios
ADP has a better Return On Assets (7.61%) than 73.26% of its industry peers.
ADP's Return On Equity of 64.90% is amongst the best of the industry. ADP outperforms 95.35% of its industry peers.
Looking at the Return On Invested Capital, with a value of 24.00%, ADP belongs to the top of the industry, outperforming 93.02% of the companies in the same industry.
ADP had an Average Return On Invested Capital over the past 3 years of 36.13%. This 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 has a better Profit Margin (19.79%) than 87.21% of its industry peers.
In the last couple of years the Profit Margin of ADP has grown nicely.
Looking at the Operating Margin, with a value of 26.27%, ADP belongs to the top of the industry, outperforming 91.86% of the companies in the same industry.
ADP's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 47.26%, ADP is doing good in the industry, outperforming 61.63% of the companies in the same industry.
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.
The number of shares outstanding for ADP has been reduced compared to 1 year ago.
The number of shares outstanding for ADP has been reduced compared to 5 years ago.
Compared to 1 year ago, ADP has a worse debt to assets ratio.
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 comparable to the rest of the industry.
ADP has a debt to FCF ratio of 2.18. This is a good value and a sign of high solvency as ADP would need 2.18 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.18, ADP is in the better half of the industry, outperforming 70.93% of the companies in the same industry.
ADP has a Debt/Equity ratio of 1.44. This is a high value indicating a heavy dependency on external financing.
ADP has a worse Debt to Equity ratio (1.44) than 75.58% of its industry peers.
Even though the debt/equity ratio score it not favorable for ADP, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.44 | ||
| Debt/FCF | 2.18 | ||
| Altman-Z | 2.74 |
ROIC/WACC2.79
WACC8.61%
2.3 Liquidity
ADP has a Current 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's Current ratio of 1.05 is on the low side compared to the rest of the industry. ADP is outperformed by 73.26% of its industry peers.
A Quick Ratio of 1.05 indicates that ADP should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.05, ADP is not doing good in the industry: 73.26% of the companies in the same industry are doing better.
| 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.
ADP shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.05% yearly.
ADP shows a small growth in Revenue. In the last year, the Revenue has grown by 7.07%.
Measured over the past years, ADP shows a small growth in Revenue. The Revenue has been growing by 7.10% on average per year.
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
The Earnings Per Share is expected to grow by 7.81% on average over the next years.
Based on estimates for the next years, ADP will show a small growth in Revenue. The Revenue will grow by 5.68% on average per year.
EPS Next Y10.23%
EPS Next 2Y9.84%
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 25.55, the valuation of ADP can be described as expensive.
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 26.84. ADP is around the same levels.
A Price/Forward Earnings ratio of 21.52 indicates a rather expensive valuation of ADP.
ADP's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 23.40. ADP is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.55 | ||
| Fwd PE | 21.52 |
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 | 24.94 | ||
| EV/EBITDA | 15.71 |
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.
ADP has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.5
PEG (5Y)2.31
EPS Next 2Y9.84%
EPS Next 3Y9.55%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.63%, ADP has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.58, ADP pays a better dividend. On top of this ADP pays more dividend than 84.88% of the companies listed in the same industry.
ADP's Dividend Yield is a higher than the S&P500 average which is at 2.00.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.63% |
5.2 History
On average, the dividend of ADP grows each year by 11.62%, which is quite nice.
ADP has been paying a dividend for at least 10 years, so it has a reliable track record.
ADP has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
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 2Y9.84%
EPS Next 3Y9.55%
259.57
-0.04 (-0.02%)
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 Cap104.98B
Revenue(TTM)20.90B
Net Income(TTM)4.14B
Analysts65.71
Price Target296.24 (14.13%)
Short Float %1.89%
Short Ratio3.34
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.63% |
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)-1.05%
PT rev (3m)-8.88%
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)-0.37%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.03%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.55 | ||
| Fwd PE | 21.52 | ||
| P/S | 5.02 | ||
| P/FCF | 24.94 | ||
| P/OCF | 22.07 | ||
| P/B | 16.47 | ||
| P/tB | 69.96 | ||
| EV/EBITDA | 15.71 |
EPS(TTM)10.16
EY3.91%
EPS(NY)12.06
Fwd EY4.65%
FCF(TTM)10.41
FCFY4.01%
OCF(TTM)11.76
OCFY4.53%
SpS51.68
BVpS15.76
TBVpS3.71
PEG (NY)2.5
PEG (5Y)2.31
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
WACC8.61%
ROIC/WACC2.79
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 2Y9.84%
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%.