AUTOMATIC DATA PROCESSING (ADP) Stock Fundamental Analysis

NASDAQ:ADP • US0530151036

214.36 USD
-4 (-1.83%)
At close: Feb 27, 2026
213.953 USD
-0.41 (-0.19%)
After Hours: 2/27/2026, 8:00:00 PM
Overview Stock Chart Technical Analysis Fundamental Analysis Analyst Ratings Earnings Estimates Financials Ownership News
Fundamental Rating

6

ADP gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 88 industry peers in the Professional Services industry. While ADP has a great profitability rating, there are some minor concerns on its financial health. ADP is valied quite expensively at the moment, while it does show a decent growth rate. ADP also has an excellent dividend rating. This makes ADP very considerable for dividend investing!


Dividend Valuation Growth Profitability Health

9

1. Profitability

1.1 Basic Checks

  • In the past year ADP was profitable.
  • ADP had a positive operating cash flow in the past year.
  • ADP had positive earnings in each of the past 5 years.
  • In the past 5 years ADP always reported a positive cash flow from operatings.
ADP Yearly Net Income VS EBIT VS OCF VS FCFADP Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1B 2B 3B 4B 5B

1.2 Ratios

  • Looking at the Return On Assets, with a value of 5.00%, ADP is in the better half of the industry, outperforming 60.23% of the companies in the same industry.
  • ADP has a better Return On Equity (66.25%) than 95.45% of its industry peers.
  • The Return On Invested Capital of ADP (34.42%) is better than 97.73% of its industry peers.
  • ADP had an Average Return On Invested Capital over the past 3 years of 36.13%. This is significantly above the industry average of 12.74%.
Industry RankSector Rank
ROA 5%
ROE 66.25%
ROIC 34.42%
ROA(3y)7.08%
ROA(5y)6.25%
ROE(3y)81.89%
ROE(5y)76.59%
ROIC(3y)36.13%
ROIC(5y)33.86%
ADP Yearly ROA, ROE, ROICADP Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20 40 60 80

1.3 Margins

  • With an excellent Profit Margin value of 19.96%, ADP belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
  • ADP's Profit Margin has improved in the last couple of years.
  • ADP has a Operating Margin of 26.37%. This is amongst the best in the industry. ADP outperforms 90.91% of its industry peers.
  • ADP's Operating Margin has improved in the last couple of years.
  • ADP has a Gross Margin of 46.16%. This is in the better half of the industry: ADP outperforms 64.77% of its industry peers.
  • ADP's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 26.37%
PM (TTM) 19.96%
GM 46.16%
OM growth 3Y4.64%
OM growth 5Y4.17%
PM growth 3Y3.54%
PM growth 5Y3.25%
GM growth 3Y2.58%
GM growth 5Y1.81%
ADP Yearly Profit, Operating, Gross MarginsADP Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10 20 30 40

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ROAROEROICOperating and Profit MarginShow most profitable peers

5

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.
  • ADP has a worse debt/assets ratio than last year.
ADP Yearly Shares OutstandingADP Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 100M 200M 300M 400M
ADP Yearly Total Debt VS Total AssetsADP Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20B 40B 60B

2.2 Solvency

  • Based on the Altman-Z score of 1.59, we must say that ADP is in the distress zone and has some risk of bankruptcy.
  • ADP's Altman-Z score of 1.59 is on the low side compared to the rest of the industry. ADP is outperformed by 62.50% of its industry peers.
  • The Debt to FCF ratio of ADP is 0.95, which is an excellent value as it means it would take ADP, only 0.95 years of fcf income to pay off all of its debts.
  • ADP has a better Debt to FCF ratio (0.95) than 78.41% of its industry peers.
  • A Debt/Equity ratio of 0.62 indicates that ADP is somewhat dependend on debt financing.
  • ADP's Debt to Equity ratio of 0.62 is in line compared to the rest of the industry. ADP outperforms 42.05% of its industry peers.
  • 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 RankSector Rank
Debt/Equity 0.62
Debt/FCF 0.95
Altman-Z 1.59
ROIC/WACC4.09
WACC8.42%
ADP Yearly LT Debt VS Equity VS FCFADP Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2B 4B 6B

2.3 Liquidity

  • A Current Ratio of 1.03 indicates that ADP should not have too much problems paying its short term obligations.
  • The Current ratio of ADP (1.03) is worse than 75.00% of its industry peers.
  • A Quick Ratio of 1.03 indicates that ADP should not have too much problems paying its short term obligations.
  • ADP has a Quick ratio of 1.03. This is in the lower half of the industry: ADP underperforms 75.00% of its industry peers.
Industry RankSector Rank
Current Ratio 1.03
Quick Ratio 1.03
ADP Yearly Current Assets VS Current LiabilitesADP Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10B 20B 30B 40B 50B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

4

3. Growth

3.1 Past

  • The Earnings Per Share has grown by an nice 8.08% over the past year.
  • The Earnings Per Share has been growing by 11.05% on average over the past years. This is quite good.
  • ADP shows a small growth in Revenue. In the last year, the Revenue has grown by 6.59%.
  • The Revenue has been growing slightly by 7.10% on average over the past years.
EPS 1Y (TTM)8.08%
EPS 3Y12.57%
EPS 5Y11.05%
EPS Q2Q%11.49%
Revenue 1Y (TTM)6.59%
Revenue growth 3Y7.61%
Revenue growth 5Y7.1%
Sales Q2Q%6.16%

3.2 Future

  • Based on estimates for the next years, ADP will show a small growth in Earnings Per Share. The EPS will grow by 7.57% on average per year.
  • The Revenue is expected to grow by 5.64% on average over the next years.
EPS Next Y10.76%
EPS Next 2Y9.92%
EPS Next 3Y9.36%
EPS Next 5Y7.57%
Revenue Next Year6.44%
Revenue Next 2Y6.08%
Revenue Next 3Y6%
Revenue Next 5Y5.64%

3.3 Evolution

  • The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
  • The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
ADP Yearly Revenue VS EstimatesADP Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 5B 10B 15B 20B 25B
ADP Yearly EPS VS EstimatesADP Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 5 10 15

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Find the best growth stocksShow best growing peers

3

4. Valuation

4.1 Price/Earnings Ratio

  • Based on the Price/Earnings ratio of 20.55, the valuation of ADP can be described as rather 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 27.07. ADP is valued slightly cheaper when compared to this.
  • A Price/Forward Earnings ratio of 17.74 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.
  • Compared to an average S&P500 Price/Forward Earnings ratio of 28.05, ADP is valued a bit cheaper.
Industry RankSector Rank
PE 20.55
Fwd PE 17.74
ADP Price Earnings VS Forward Price EarningsADP Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

  • The rest of the industry has a similar Enterprise Value to EBITDA ratio as ADP.
  • Compared to the rest of the industry, the Price/Free Cash Flow ratio of ADP is on the same level as its industry peers.
Industry RankSector Rank
P/FCF 20.62
EV/EBITDA 14.21
ADP Per share dataADP EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30 40 50

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)1.91
PEG (5Y)1.86
EPS Next 2Y9.92%
EPS Next 3Y9.36%

More info and screens

Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

7

5. Dividend

5.1 Amount

  • With a Yearly Dividend Yield of 3.11%, ADP has a reasonable but not impressive dividend return.
  • Compared to an average industry Dividend Yield of 1.64, ADP pays a better dividend. On top of this ADP pays more dividend than 89.77% of the companies listed in the same industry.
  • ADP's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
Industry RankSector Rank
Dividend Yield 3.11%

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 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
ADP Yearly Dividends per shareADP Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2 4 6

5.3 Sustainability

  • 59.26% of the earnings are spent on dividend by ADP. This is a bit on the high side, but may be sustainable.
  • ADP's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP59.26%
EPS Next 2Y9.92%
EPS Next 3Y9.36%
ADP Yearly Income VS Free CF VS DividendADP Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1B 2B 3B 4B
ADP Dividend Payout.ADP Dividend Payout, showing the Payout Ratio.ADP Dividend Payout.PayoutRetained Earnings

More info and screens

Find the best dividend stocksShow peers with best dividend

AUTOMATIC DATA PROCESSING

NASDAQ:ADP (2/27/2026, 8:00:00 PM)

After market: 213.953 -0.41 (-0.19%)

214.36

-4 (-1.83%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)01-28
Earnings (Next)04-28
Inst Owners86.82%
Inst Owner Change2.06%
Ins Owners0.1%
Ins Owner Change-14.46%
Market Cap86.31B
Revenue(TTM)21.21B
Net Income(TTM)4.24B
Analysts64.55
Price Target282.34 (31.71%)
Short Float %2.21%
Short Ratio3.26
Dividend
Industry RankSector Rank
Dividend Yield 3.11%
Yearly Dividend5.9
Dividend Growth(5Y)11.62%
DP59.26%
Div Incr Years26
Div Non Decr Years26
Ex-Date03-13
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)0.96%
Min EPS beat(2)0.82%
Max EPS beat(2)1.1%
EPS beat(4)4
Avg EPS beat(4)1.03%
Min EPS beat(4)0.35%
Max EPS beat(4)1.85%
EPS beat(8)8
Avg EPS beat(8)1.64%
EPS beat(12)12
Avg EPS beat(12)1.62%
EPS beat(16)16
Avg EPS beat(16)1.82%
Revenue beat(2)0
Avg Revenue beat(2)-0.41%
Min Revenue beat(2)-0.59%
Max Revenue beat(2)-0.23%
Revenue beat(4)2
Avg Revenue beat(4)-0.02%
Min Revenue beat(4)-0.59%
Max Revenue beat(4)0.64%
Revenue beat(8)4
Avg Revenue beat(8)-0.02%
Revenue beat(12)6
Avg Revenue beat(12)-0.08%
Revenue beat(16)9
Avg Revenue beat(16)-0.02%
PT rev (1m)-4.69%
PT rev (3m)-5.69%
EPS NQ rev (1m)0.58%
EPS NQ rev (3m)0.76%
EPS NY rev (1m)0.48%
EPS NY rev (3m)0.48%
Revenue NQ rev (1m)0.27%
Revenue NQ rev (3m)0.29%
Revenue NY rev (1m)0.19%
Revenue NY rev (3m)0.2%
Valuation
Industry RankSector Rank
PE 20.55
Fwd PE 17.74
P/S 4.07
P/FCF 20.62
P/OCF 18.21
P/B 13.5
P/tB 58.46
EV/EBITDA 14.21
EPS(TTM)10.43
EY4.87%
EPS(NY)12.08
Fwd EY5.64%
FCF(TTM)10.39
FCFY4.85%
OCF(TTM)11.77
OCFY5.49%
SpS52.69
BVpS15.88
TBVpS3.67
PEG (NY)1.91
PEG (5Y)1.86
Graham Number61.04
Profitability
Industry RankSector Rank
ROA 5%
ROE 66.25%
ROCE 44.75%
ROIC 34.42%
ROICexc 42.91%
ROICexgc 84.18%
OM 26.37%
PM (TTM) 19.96%
GM 46.16%
FCFM 19.73%
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 Turnover0.25
Health
Industry RankSector Rank
Debt/Equity 0.62
Debt/FCF 0.95
Debt/EBITDA 0.64
Cap/Depr 94.94%
Cap/Sales 2.62%
Interest Coverage 12.97
Cash Conversion 76.72%
Profit Quality 98.81%
Current Ratio 1.03
Quick Ratio 1.03
Altman-Z 1.59
F-Score6
WACC8.42%
ROIC/WACC4.09
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)8.08%
EPS 3Y12.57%
EPS 5Y11.05%
EPS Q2Q%11.49%
EPS Next Y10.76%
EPS Next 2Y9.92%
EPS Next 3Y9.36%
EPS Next 5Y7.57%
Revenue 1Y (TTM)6.59%
Revenue growth 3Y7.61%
Revenue growth 5Y7.1%
Sales Q2Q%6.16%
Revenue Next Year6.44%
Revenue Next 2Y6.08%
Revenue Next 3Y6%
Revenue Next 5Y5.64%
EBIT growth 1Y6.33%
EBIT growth 3Y12.61%
EBIT growth 5Y11.57%
EBIT Next Year19.16%
EBIT Next 3Y11.05%
EBIT Next 5Y10.37%
FCF growth 1Y23.42%
FCF growth 3Y19.94%
FCF growth 5Y12.76%
OCF growth 1Y20.04%
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 for ADP stock?

ChartMill assigns a valuation rating of 4 / 10 to AUTOMATIC DATA PROCESSING (ADP). This can be considered as Fairly Valued.


What is the profitability of ADP stock?

AUTOMATIC DATA PROCESSING (ADP) has a profitability rating of 9 / 10.


Can you provide the expected EPS growth for ADP stock?

The Earnings per Share (EPS) of AUTOMATIC DATA PROCESSING (ADP) is expected to grow by 10.76% in the next year.


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 59.26%.