226.3 USD
-5.06 (-2.19%)
Last: Feb 9, 2026, 11:35 AM
We assign a fundamental rating of 6 out of 10 to ADP. ADP was compared to 89 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 correct valuation and a medium growth rate. ADP also has an excellent dividend rating. These ratings could make ADP a good candidate for dividend investing.
1. Profitability
1.1 Basic Checks
- ADP had positive earnings in the past year.
- In the past year ADP had a positive cash flow from operations.
- ADP had positive earnings in each of the past 5 years.
- Each year in the past 5 years ADP had a positive operating cash flow.
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 61.80% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 66.25%, ADP belongs to the top of the industry, outperforming 95.51% of the companies in the same industry.
- ADP has a better Return On Invested Capital (34.42%) than 97.75% 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 12.01%.
| Industry Rank | Sector 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%
1.3 Margins
- The Profit Margin of ADP (19.96%) is better than 87.64% of its industry peers.
- In the last couple of years the Profit Margin of ADP has grown nicely.
- ADP has a Operating Margin of 26.37%. This is amongst the best in the industry. ADP outperforms 92.13% of its industry peers.
- In the last couple of years the Operating Margin of ADP has grown nicely.
- Looking at the Gross Margin, with a value of 46.16%, ADP is in the better half of the industry, outperforming 64.04% of the companies in the same industry.
- In the last couple of years the Gross Margin of ADP has grown nicely.
| Industry Rank | Sector 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%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ADP is creating value.
- Compared to 1 year ago, ADP has less shares outstanding
- 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
- Based on the Altman-Z score of 1.65, we must say that ADP is in the distress zone and has some risk of bankruptcy.
- With a Altman-Z score value of 1.65, ADP is not doing good in the industry: 62.92% of the companies in the same industry are doing better.
- 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 82.02% of its industry peers.
- A Debt/Equity ratio of 0.62 indicates that ADP is somewhat dependend on debt financing.
- With a Debt to Equity ratio value of 0.62, ADP perfoms like the industry average, outperforming 42.70% of the companies in the same industry.
- 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 | 0.62 | ||
| Debt/FCF | 0.95 | ||
| Altman-Z | 1.65 |
ROIC/WACC3.97
WACC8.67%
2.3 Liquidity
- A Current Ratio of 1.03 indicates that ADP should not have too much problems paying its short term obligations.
- Looking at the Current ratio, with a value of 1.03, ADP is doing worse than 73.03% of the companies in the same industry.
- 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 73.03% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.03 | ||
| Quick Ratio | 1.03 |
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.
- The Revenue has been growing slightly by 6.59% in the past year.
- 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)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
- 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 Y10.76%
EPS Next 2Y9.92%
EPS Next 3Y9.36%
EPS Next 5Y7.91%
Revenue Next Year6.43%
Revenue Next 2Y6.08%
Revenue Next 3Y5.99%
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
- Based on the Price/Earnings ratio of 21.70, the valuation of ADP can be described as rather expensive.
- ADP's Price/Earnings ratio is in line with the industry average.
- ADP is valuated rather cheaply when we compare the Price/Earnings ratio to 27.93, which is the current average of the S&P500 Index.
- Based on the Price/Forward Earnings ratio of 18.73, the valuation of ADP can be described as rather expensive.
- ADP's Price/Forward Earnings ratio is in line with the industry average.
- When comparing the Price/Forward Earnings ratio of ADP to the average of the S&P500 Index (27.77), we can say ADP is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.7 | ||
| Fwd PE | 18.73 |
4.2 Price Multiples
- ADP's Enterprise Value to EBITDA ratio is in line with the industry average.
- 64.04% 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 | 21.87 | ||
| EV/EBITDA | 15.38 |
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)2.02
PEG (5Y)1.96
EPS Next 2Y9.92%
EPS Next 3Y9.36%
5. Dividend
5.1 Amount
- ADP has a Yearly Dividend Yield of 2.91%.
- Compared to an average industry Dividend Yield of 1.43, ADP pays a better dividend. On top of this ADP pays more dividend than 89.89% 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 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.91% |
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
- ADP pays out 59.26% of its income as dividend. 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%
NASDAQ:ADP (2/9/2026, 11:35:08 AM)
226.3
-5.06 (-2.19%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)01-28 2026-01-28/bmo
Earnings (Next)04-28 2026-04-28/bmo
Inst Owners86.82%
Inst Owner Change0.28%
Ins Owners0.1%
Ins Owner Change-10.79%
Market Cap91.53B
Revenue(TTM)21.21B
Net Income(TTM)4.24B
Analysts55
Price Target286.67 (26.68%)
Short Float %1.83%
Short Ratio3.1
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.91% |
Yearly Dividend5.9
Dividend Growth(5Y)11.62%
DP59.26%
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)0.96%
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)-3.23%
PT rev (3m)-9.2%
EPS NQ rev (1m)0.82%
EPS NQ rev (3m)0.82%
EPS NY rev (1m)0.48%
EPS NY rev (3m)0.48%
Revenue NQ rev (1m)0.31%
Revenue NQ rev (3m)0.32%
Revenue NY rev (1m)0.18%
Revenue NY rev (3m)0.19%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.7 | ||
| Fwd PE | 18.73 | ||
| P/S | 4.31 | ||
| P/FCF | 21.87 | ||
| P/OCF | 19.31 | ||
| P/B | 14.32 | ||
| P/tB | 62 | ||
| EV/EBITDA | 15.38 |
EPS(TTM)10.43
EY4.61%
EPS(NY)12.08
Fwd EY5.34%
FCF(TTM)10.35
FCFY4.57%
OCF(TTM)11.72
OCFY5.18%
SpS52.45
BVpS15.81
TBVpS3.65
PEG (NY)2.02
PEG (5Y)1.96
Graham Number60.91
Profitability
| Industry Rank | Sector 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 Rank | Sector 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 | 1.65 |
F-Score6
WACC8.67%
ROIC/WACC3.97
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 5Y7.91%
Revenue 1Y (TTM)6.59%
Revenue growth 3Y7.61%
Revenue growth 5Y7.1%
Sales Q2Q%6.16%
Revenue Next Year6.43%
Revenue Next 2Y6.08%
Revenue Next 3Y5.99%
Revenue Next 5Y5.68%
EBIT growth 1Y6.33%
EBIT growth 3Y12.61%
EBIT growth 5Y11.57%
EBIT Next Year18.65%
EBIT Next 3Y11.07%
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%.