260.44 USD
+0.24 (+0.09%)
260.44 USD
0 (0%)
ADP gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 88 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 would make ADP suitable 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
- ADP has a Return On Assets of 7.61%. This is in the better half of the industry: ADP outperforms 73.86% of its industry peers.
- Looking at the Return On Equity, with a value of 64.90%, ADP belongs to the top of the industry, outperforming 95.45% of the companies in the same industry.
- ADP's Return On Invested Capital of 24.00% is amongst the best of the industry. ADP outperforms 93.18% 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 11.85%.
- 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
- With an excellent Profit Margin value of 19.79%, ADP belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
- In the last couple of years the Profit Margin of ADP has grown nicely.
- ADP has a better Operating Margin (26.27%) than 92.05% of its industry peers.
- ADP's Operating Margin has improved in the last couple of years.
- The Gross Margin of ADP (47.26%) is better than 63.64% of its industry peers.
- In the last couple of years the Gross Margin of ADP has grown nicely.
| 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
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ADP is creating value.
- ADP has less shares outstanding than it did 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.
2.2 Solvency
- An Altman-Z score of 2.75 indicates that ADP is not a great score, but indicates only limited risk for bankruptcy at the moment.
- ADP has a Altman-Z score (2.75) which is comparable to the rest of the industry.
- 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 71.59% 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.
- The Debt to Equity ratio of ADP (1.44) is worse than 73.86% 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 Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.44 | ||
| Debt/FCF | 2.18 | ||
| Altman-Z | 2.75 |
ROIC/WACC2.76
WACC8.71%
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.
- The Current ratio of ADP (1.05) is worse than 71.59% 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.
- Looking at the Quick ratio, with a value of 1.05, ADP is doing worse than 71.59% of the companies in the same industry.
| 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.
- ADP shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.10% yearly.
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 7.91% on average over the next years.
- The Revenue is expected to grow by 5.68% on average over the next years.
EPS Next Y10.23%
EPS Next 2Y9.84%
EPS Next 3Y9.55%
EPS Next 5Y7.91%
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
- A Price/Earnings ratio of 25.63 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 27.38. ADP is around the same levels.
- ADP is valuated rather expensively with a Price/Forward Earnings ratio of 21.59.
- ADP's Price/Forward Earnings ratio is in line with the industry average.
- ADP is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 24.29, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.63 | ||
| Fwd PE | 21.59 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as ADP.
- Based on the Price/Free Cash Flow ratio, ADP is valued a bit cheaper than the industry average as 65.91% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.02 | ||
| EV/EBITDA | 15.77 |
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)2.51
PEG (5Y)2.32
EPS Next 2Y9.84%
EPS Next 3Y9.55%
5. Dividend
5.1 Amount
- ADP has a Yearly Dividend Yield of 2.61%. Purely for dividend investing, there may be better candidates out there.
- ADP's Dividend Yield is rather good when compared to the industry average which is at 1.41. ADP pays more dividend than 86.36% of the companies in the same industry.
- ADP's Dividend Yield is a higher than the S&P500 average which is at 1.85.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.61% |
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 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 2Y9.84%
EPS Next 3Y9.55%
260.44
+0.24 (+0.09%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)10-29 2025-10-29/bmo
Earnings (Next)01-28 2026-01-28/bmo
Inst Owners86.82%
Inst Owner Change-0.1%
Ins Owners0.1%
Ins Owner Change3.17%
Market Cap105.33B
Revenue(TTM)20.90B
Net Income(TTM)4.14B
Analysts55
Price Target296.24 (13.75%)
Short Float %1.89%
Short Ratio3.34
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-Date03-13 2026-03-13 (1.7)
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)-0.4%
PT rev (3m)-8.23%
EPS NQ rev (1m)0.03%
EPS NQ rev (3m)-1%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.07%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)-0.35%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.63 | ||
| Fwd PE | 21.59 | ||
| P/S | 5.04 | ||
| P/FCF | 25.02 | ||
| P/OCF | 22.14 | ||
| P/B | 16.53 | ||
| P/tB | 70.2 | ||
| EV/EBITDA | 15.77 |
EPS(TTM)10.16
EY3.9%
EPS(NY)12.06
Fwd EY4.63%
FCF(TTM)10.41
FCFY4%
OCF(TTM)11.76
OCFY4.52%
SpS51.68
BVpS15.76
TBVpS3.71
PEG (NY)2.51
PEG (5Y)2.32
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 | 2.75 |
F-Score6
WACC8.71%
ROIC/WACC2.76
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 5Y7.91%
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 for 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 expected EPS growth for ADP stock?
The Earnings per Share (EPS) of AUTOMATIC DATA PROCESSING (ADP) is expected to grow by 10.23% 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 59.3%.