AUTOMATIC DATA PROCESSING (ADP) Stock Fundamental Analysis
NASDAQ:ADP • US0530151036
216.42 USD
+1.45 (+0.67%)
Last: Mar 3, 2026, 03:16 PM
Overall ADP gets a fundamental rating of 6 out of 10. We evaluated ADP 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. While showing a medium growth rate, ADP is valued expensive at the moment. 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.
- In the past 5 years ADP has always been profitable.
- In the past 5 years ADP always reported a positive cash flow from operatings.
1.2 Ratios
- ADP's Return On Assets of 5.00% is fine compared to the rest of the industry. ADP outperforms 60.23% of its industry peers.
- With an excellent Return On Equity value of 66.25%, ADP belongs to the best of the industry, outperforming 95.45% of the companies in the same industry.
- With an excellent Return On Invested Capital value of 34.42%, ADP belongs to the best of the industry, outperforming 97.73% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for ADP is significantly above the industry average of 12.78%.
| 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
- Looking at the Profit Margin, with a value of 19.96%, ADP belongs to the top 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's Operating Margin of 26.37% is amongst the best of the industry. ADP outperforms 90.91% of its industry peers.
- ADP's Operating Margin has improved in the last couple of years.
- Looking at the Gross Margin, with a value of 46.16%, ADP is in the better half of the industry, outperforming 64.77% 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
- 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
- The number of shares outstanding for ADP has been reduced compared to 5 years ago.
- The debt/assets ratio for ADP is higher compared to a year ago.
2.2 Solvency
- ADP has an Altman-Z score of 1.60. This is a bad value and indicates that ADP is not financially healthy and even has some risk of bankruptcy.
- ADP's Altman-Z score of 1.60 is on the low side compared to the rest of the industry. ADP is outperformed by 62.50% of its industry peers.
- ADP has a debt to FCF ratio of 0.95. This is a very positive value and a sign of high solvency as it would only need 0.95 years to pay back of all of its debts.
- The Debt to FCF ratio of ADP (0.95) is better than 78.41% of its industry peers.
- A Debt/Equity ratio of 0.62 indicates that ADP is somewhat dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.62, ADP is in line with its industry, outperforming 42.05% 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 | 1.6 |
ROIC/WACC4.09
WACC8.42%
2.3 Liquidity
- ADP has a Current Ratio of 1.03. 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 Current ratio (1.03) 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's Quick ratio of 1.03 is on the low side compared to the rest of the industry. ADP is outperformed by 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.03 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
- ADP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.08%, which is quite good.
- 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 6.59% 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)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.
- ADP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.64% yearly.
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.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 20.75, ADP is valued on the expensive side.
- The rest of the industry has a similar Price/Earnings ratio as ADP.
- The average S&P500 Price/Earnings ratio is at 27.13. ADP is valued slightly cheaper when compared to this.
- A Price/Forward Earnings ratio of 17.91 indicates a rather expensive valuation of ADP.
- 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 (28.11), we can say ADP is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.75 | ||
| Fwd PE | 17.91 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ADP is on the same level as its industry peers.
- ADP's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.82 | ||
| EV/EBITDA | 14.25 |
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)1.93
PEG (5Y)1.88
EPS Next 2Y9.92%
EPS Next 3Y9.36%
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 Rank | Sector 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
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.
- The dividend of ADP is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP59.26%
EPS Next 2Y9.92%
EPS Next 3Y9.36%
NASDAQ:ADP (3/3/2026, 3:16:07 PM)
216.42
+1.45 (+0.67%)
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 Change2.06%
Ins Owners0.1%
Ins Owner Change-14.46%
Market Cap87.14B
Revenue(TTM)21.21B
Net Income(TTM)4.24B
Analysts64.55
Price Target282.34 (30.46%)
Short Float %2.48%
Short Ratio3.22
Dividend
| Industry Rank | Sector 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 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)-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 Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.75 | ||
| Fwd PE | 17.91 | ||
| P/S | 4.11 | ||
| P/FCF | 20.82 | ||
| P/OCF | 18.38 | ||
| P/B | 13.63 | ||
| P/tB | 59.03 | ||
| EV/EBITDA | 14.25 |
EPS(TTM)10.43
EY4.82%
EPS(NY)12.08
Fwd EY5.58%
FCF(TTM)10.39
FCFY4.8%
OCF(TTM)11.77
OCFY5.44%
SpS52.69
BVpS15.88
TBVpS3.67
PEG (NY)1.93
PEG (5Y)1.88
Graham Number61.04
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 | 1.6 |
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 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 10.76% 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%.