AUTOMATIC DATA PROCESSING (ADP.DE) Stock Fundamental Analysis
Europe - FRA:ADP - US0530151036 - Common Stock
248.35 EUR
+0.25 (+0.1%)
Overall ADP gets a fundamental rating of 6 out of 10. We evaluated ADP against 32 industry peers in the Professional Services industry. ADP scores excellent on profitability, but 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.
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.
Each year in the past 5 years ADP has 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 7.64%. This is in the better half of the industry: ADP outperforms 78.13% of its industry peers.
The Return On Equity of ADP (65.93%) is better than 84.38% of its industry peers.
ADP has a Return On Invested Capital of 24.78%. This is amongst the best in the industry. ADP outperforms 90.63% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ADP is significantly above the industry average of 12.59%.
The last Return On Invested Capital (24.78%) 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 | 7.64% | ||
| ROE | 65.93% | ||
| ROIC | 24.78% |
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
ADP's Profit Margin of 19.84% is amongst the best of the industry. ADP outperforms 93.75% of its industry peers.
ADP's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 26.42%, ADP belongs to the best of the industry, outperforming 93.75% of the companies in the same industry.
ADP's Operating Margin has improved in the last couple of years.
With a Gross Margin value of 47.37%, ADP perfoms like the industry average, outperforming 40.63% 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 | 26.42% | ||
| PM (TTM) | 19.84% | ||
| GM | 47.37% |
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.
ADP has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, ADP has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.93 indicates that ADP is not a great score, but indicates only limited risk for bankruptcy at the moment.
ADP's Altman-Z score of 2.93 is fine compared to the rest of the industry. ADP outperforms 65.63% of its industry peers.
ADP has a debt to FCF ratio of 1.99. This is a very positive value and a sign of high solvency as it would only need 1.99 years to pay back of all of its debts.
ADP has a Debt to FCF ratio of 1.99. This is amongst the best in the industry. ADP outperforms 90.63% of its industry peers.
A Debt/Equity ratio of 1.41 is on the high side and indicates that ADP has dependencies on debt financing.
ADP has a Debt to Equity ratio of 1.41. This is in the lower half of the industry: ADP underperforms 65.63% 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 | 1.41 | ||
| Debt/FCF | 1.99 | ||
| Altman-Z | 2.93 |
ROIC/WACC2.88
WACC8.6%
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.
With a Current ratio value of 1.05, ADP perfoms like the industry average, outperforming 46.88% of the companies in the same industry.
A Quick Ratio of 1.05 indicates that ADP should not have too much problems paying its short term obligations.
ADP has a Quick ratio (1.05) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.05 | ||
| Quick Ratio | 1.05 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 8.93% 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 7.07%.
ADP shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.10% yearly.
EPS 1Y (TTM)8.93%
EPS 3Y12.57%
EPS 5Y11.05%
EPS Q2Q%8.13%
Revenue 1Y (TTM)7.07%
Revenue growth 3Y7.61%
Revenue growth 5Y7.1%
Sales Q2Q%7.51%
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 7.85% on average per year.
The Revenue is expected to grow by 5.65% on average over the next years.
EPS Next Y10.3%
EPS Next 2Y9.86%
EPS Next 3Y9.6%
EPS Next 5Y7.85%
Revenue Next Year6.2%
Revenue Next 2Y5.95%
Revenue Next 3Y5.91%
Revenue Next 5Y5.65%
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
With a Price/Earnings ratio of 29.15, ADP can be considered very expensive at the moment.
ADP's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of ADP to the average of the S&P500 Index (27.38), we can say ADP is valued inline with the index average.
ADP is valuated quite expensively with a Price/Forward Earnings ratio of 26.42.
ADP's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. ADP is more expensive than 68.75% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ADP to the average of the S&P500 Index (22.86), we can say ADP is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.15 | ||
| Fwd PE | 26.42 |
4.2 Price Multiples
ADP's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. ADP is more expensive than 62.50% of the companies in the same industry.
ADP's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. ADP is more expensive than 62.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.88 | ||
| EV/EBITDA | 18.24 |
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)2.83
PEG (5Y)2.64
EPS Next 2Y9.86%
EPS Next 3Y9.6%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.12%, ADP has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.44, ADP has a dividend in line with its industry peers.
ADP's Dividend Yield is comparable with the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.12% |
5.2 History
The dividend of ADP is nicely growing with an annual growth rate of 11.62%!
Dividend Growth(5Y)11.62%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
58.80% 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.
DP58.8%
EPS Next 2Y9.86%
EPS Next 3Y9.6%
FRA:ADP (9/19/2025, 7:00:00 PM)
248.35
+0.25 (+0.1%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners85.28%
Inst Owner ChangeN/A
Ins Owners0.11%
Ins Owner ChangeN/A
Market Cap100.59B
Analysts67
Price TargetN/A
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.12% |
Yearly Dividend5.03
Dividend Growth(5Y)11.62%
DP58.8%
Div Incr Years2
Div Non Decr Years2
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.1%
Min EPS beat(2)0.35%
Max EPS beat(2)1.85%
EPS beat(4)4
Avg EPS beat(4)2.06%
Min EPS beat(4)0.35%
Max EPS beat(4)4.53%
EPS beat(8)8
Avg EPS beat(8)1.67%
EPS beat(12)12
Avg EPS beat(12)1.7%
EPS beat(16)16
Avg EPS beat(16)2.33%
Revenue beat(2)2
Avg Revenue beat(2)0.38%
Min Revenue beat(2)0.11%
Max Revenue beat(2)0.64%
Revenue beat(4)4
Avg Revenue beat(4)0.38%
Min Revenue beat(4)0.11%
Max Revenue beat(4)0.64%
Revenue beat(8)4
Avg Revenue beat(8)-0.16%
Revenue beat(12)7
Avg Revenue beat(12)-0.04%
Revenue beat(16)11
Avg Revenue beat(16)0.12%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)-1.12%
EPS NQ rev (3m)-1.12%
EPS NY rev (1m)0.19%
EPS NY rev (3m)0.19%
Revenue NQ rev (1m)1.15%
Revenue NQ rev (3m)1.15%
Revenue NY rev (1m)1.82%
Revenue NY rev (3m)1.82%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.15 | ||
| Fwd PE | 26.42 | ||
| P/S | 5.74 | ||
| P/FCF | 26.88 | ||
| P/OCF | 23.9 | ||
| P/B | 19.08 | ||
| P/tB | 90.01 | ||
| EV/EBITDA | 18.24 |
EPS(TTM)8.52
EY3.43%
EPS(NY)9.4
Fwd EY3.78%
FCF(TTM)9.24
FCFY3.72%
OCF(TTM)10.39
OCFY4.18%
SpS43.25
BVpS13.02
TBVpS2.76
PEG (NY)2.83
PEG (5Y)2.64
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.64% | ||
| ROE | 65.93% | ||
| ROCE | 44.92% | ||
| ROIC | 24.78% | ||
| ROICexc | 46.35% | ||
| ROICexgc | 100.97% | ||
| OM | 26.42% | ||
| PM (TTM) | 19.84% | ||
| GM | 47.37% | ||
| FCFM | 21.36% |
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%
ROICexcg growth 3Y-1.22%
ROICexcg 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-Score8
Asset Turnover0.39
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.41 | ||
| Debt/FCF | 1.99 | ||
| Debt/EBITDA | 1.45 | ||
| Cap/Depr | 93.92% | ||
| Cap/Sales | 2.66% | ||
| Interest Coverage | 12.73 | ||
| Cash Conversion | 82.14% | ||
| Profit Quality | 107.67% | ||
| Current Ratio | 1.05 | ||
| Quick Ratio | 1.05 | ||
| Altman-Z | 2.93 |
F-Score8
WACC8.6%
ROIC/WACC2.88
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)8.93%
EPS 3Y12.57%
EPS 5Y11.05%
EPS Q2Q%8.13%
EPS Next Y10.3%
EPS Next 2Y9.86%
EPS Next 3Y9.6%
EPS Next 5Y7.85%
Revenue 1Y (TTM)7.07%
Revenue growth 3Y7.61%
Revenue growth 5Y7.1%
Sales Q2Q%7.51%
Revenue Next Year6.2%
Revenue Next 2Y5.95%
Revenue Next 3Y5.91%
Revenue Next 5Y5.65%
EBIT growth 1Y8.87%
EBIT growth 3Y12.61%
EBIT growth 5Y11.57%
EBIT Next Year18.77%
EBIT Next 3Y11.41%
EBIT Next 5Y10.37%
FCF growth 1Y22.22%
FCF growth 3Y19.94%
FCF growth 5Y12.76%
OCF growth 1Y18.81%
OCF growth 3Y16.81%
OCF growth 5Y10.3%