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Should you consider NASDAQ:ADP for quality investing?

By Mill Chart

Last update: Aug 10, 2023

Quality investors are looking for the best of the best. Companies which are growing steadily and consistently, but are also in excellent financial condition. We will have a look here to see if AUTOMATIC DATA PROCESSING (NASDAQ:ADP) is suited for quality investing. Investors should of couse do their own research, but we spotted AUTOMATIC DATA PROCESSING showing up in our Caviar Cruise quality screen, so it may be worth spending some more time on it.

Looking into the quality metrics of AUTOMATIC DATA PROCESSING

  • The 5-year revenue growth of AUTOMATIC DATA PROCESSING has been remarkable, with 6.3% increase. This showcases the company's strong performance in driving revenue growth and indicates its competitiveness within the market.
  • The ROIC excluding cash and goodwill of AUTOMATIC DATA PROCESSING stands at 143.0%, reflecting the company's strong financial management and profitability. This metric underscores its ability to generate favorable returns on the capital invested in its core operations.
  • The Debt/Free Cash Flow Ratio of AUTOMATIC DATA PROCESSING stands at 0.82, reflecting the company's prudent capital structure and cash flow dynamics. This ratio highlights the company's ability to generate robust free cash flow relative to its debt obligations.
  • AUTOMATIC DATA PROCESSING demonstrates consistent Profit Quality over the past 5 years, with a strong 96.54%. This indicates the company's ability to generate sustainable and reliable profits, showcasing its long-term profitability and financial stability.
  • With a robust 5-year EBIT growth of 12.01%, AUTOMATIC DATA PROCESSING showcases its ability to consistently expand its operating profitability. This trend indicates the company's effective cost management and revenue generation strategies.
  • The EBIT 5-year growth of AUTOMATIC DATA PROCESSING has outpaced its Revenue 5-year growth, reflecting the company's focus on optimizing its profitability and generating sustainable earnings. This trend underscores its strong financial management.

What is the full fundamental picture of NASDAQ:ADP telling us.

ChartMill assigns a Fundamental Rating to every stock. This score ranges from 0 to 10 and is updated daily. The score is determined by evaluating multiple fundamental indicators and properties.

We assign a fundamental rating of 6 out of 10 to ADP. ADP was compared to 77 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 is valied quite expensively at the moment, while it does show a decent growth rate.

For an up to date full fundamental analysis you can check the fundamental report of ADP

More ideas for quality investing can be found on ChartMill in our Caviar Cruise screen.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.



NASDAQ:ADP (11/29/2023, 7:00:00 PM)

After market: 229.16 0 (0%)


+0.17 (+0.07%)

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