AUTOMATIC DATA PROCESSING (ADP.DE) Stock Fundamental Analysis
Europe - FRA:ADP - US0530151036 - Common Stock
248.35 EUR
+0.25 (+0.1%)
Taking everything into account, ADP scores 6 out of 10 in our fundamental rating. ADP was compared to 32 industry peers in the Professional Services industry. Both the health and profitability get an excellent rating, making ADP a very profitable company, without any liquidiy or solvency issues. ADP is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
ADP had positive earnings in the past year.
ADP had a positive operating cash flow in the past year.
In the past 5 years ADP has always been profitable.
Each year in the past 5 years ADP had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 6.90%, ADP is doing good in the industry, outperforming 78.13% of the companies in the same industry.
The Return On Equity of ADP (82.51%) is better than 84.38% of its industry peers.
ADP's Return On Invested Capital of 41.35% is amongst the best of the industry. ADP outperforms 100.00% of its industry peers.
ADP had an Average Return On Invested Capital over the past 3 years of 40.21%. This is significantly above the industry average of 12.59%.
The last Return On Invested Capital (41.35%) for ADP is above the 3 year average (40.21%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.9% | ||
| ROE | 82.51% | ||
| ROIC | 41.35% |
ROA(3y)6.09%
ROA(5y)5.98%
ROE(3y)90.39%
ROE(5y)71.98%
ROIC(3y)40.21%
ROIC(5y)34.27%
1.3 Margins
The Profit Margin of ADP (19.54%) is better than 93.75% of its industry peers.
ADP's Profit Margin has improved in the last couple of years.
ADP has a better Operating Margin (25.98%) than 93.75% of its industry peers.
In the last couple of years the Operating Margin of ADP has grown nicely.
ADP has a Gross Margin (45.62%) which is comparable to the rest of the industry.
ADP's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.98% | ||
| PM (TTM) | 19.54% | ||
| GM | 45.62% |
OM growth 3Y5.45%
OM growth 5Y3.92%
PM growth 3Y4.1%
PM growth 5Y3.75%
GM growth 3Y2.32%
GM growth 5Y1.05%
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
Compared to 5 years ago, ADP has less shares outstanding
ADP has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.71 indicates that ADP is not a great score, but indicates only limited risk for bankruptcy at the moment.
ADP has a Altman-Z score (2.71) which is in line with its industry peers.
The Debt to FCF ratio of ADP is 0.83, which is an excellent value as it means it would take ADP, only 0.83 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 0.83, ADP belongs to the best of the industry, outperforming 96.88% of the companies in the same industry.
A Debt/Equity ratio of 0.66 indicates that ADP is somewhat dependend on debt financing.
ADP has a Debt to Equity ratio (0.66) which is in line with 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 | 0.66 | ||
| Debt/FCF | 0.83 | ||
| Altman-Z | 2.71 |
ROIC/WACC4.72
WACC8.76%
2.3 Liquidity
A Current Ratio of 1.01 indicates that ADP should not have too much problems paying its short term obligations.
ADP's Current ratio of 1.01 is in line compared to the rest of the industry. ADP outperforms 43.75% of its industry peers.
ADP has a Quick Ratio of 1.01. 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 Quick ratio value of 1.01, ADP perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
The current and quick ratio evaluation for ADP is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.01 | ||
| Quick Ratio | 1.01 |
3. Growth
3.1 Past
ADP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.54%, which is quite good.
ADP shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.99% yearly.
Looking at the last year, ADP shows a small growth in Revenue. The Revenue has grown by 6.61% in the last year.
The Revenue has been growing slightly by 6.36% on average over the past years.
EPS 1Y (TTM)11.54%
EPS 3Y15.1%
EPS 5Y10.99%
EPS Q2Q%10.58%
Revenue 1Y (TTM)6.61%
Revenue growth 3Y8.57%
Revenue growth 5Y6.36%
Sales Q2Q%6.49%
3.2 Future
ADP is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.11% yearly.
The Revenue is expected to grow by 5.30% on average over the next years.
EPS Next Y10.37%
EPS Next 2Y9.51%
EPS Next 3Y9.18%
EPS Next 5Y8.11%
Revenue Next Year5.53%
Revenue Next 2Y5.54%
Revenue Next 3Y5.59%
Revenue Next 5Y5.3%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 31.96 indicates a quite expensive valuation of ADP.
ADP's Price/Earnings ratio is in line with the industry average.
ADP's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.38.
ADP is valuated quite expensively with a Price/Forward Earnings ratio of 28.97.
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 slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.96 | ||
| Fwd PE | 28.97 |
4.2 Price Multiples
71.88% of the companies in the same industry are cheaper than ADP, based on the Enterprise Value to EBITDA ratio.
ADP's Price/Free Cash Flow 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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.3 | ||
| EV/EBITDA | 21.42 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
ADP has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)3.08
PEG (5Y)2.91
EPS Next 2Y9.51%
EPS Next 3Y9.18%
5. Dividend
5.1 Amount
ADP has a Yearly Dividend Yield of 2.04%. Purely for dividend investing, there may be better candidates out there.
ADP's Dividend Yield is comparable with the industry average which is at 3.37.
Compared to an average S&P500 Dividend Yield of 2.38, ADP has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.04% |
5.2 History
The dividend of ADP is nicely growing with an annual growth rate of 12.44%!
Dividend Growth(5Y)12.44%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
ADP pays out 58.18% 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.
DP58.18%
EPS Next 2Y9.51%
EPS Next 3Y9.18%
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 OwnersN/A
Inst Owner ChangeN/A
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap101.28B
Analysts66.09
Price Target249.02 (0.27%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.04% |
Yearly Dividend5.32
Dividend Growth(5Y)12.44%
DP58.18%
Div Incr Years2
Div Non Decr Years2
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.47%
Min EPS beat(2)0.58%
Max EPS beat(2)2.37%
EPS beat(4)4
Avg EPS beat(4)1.29%
Min EPS beat(4)0.5%
Max EPS beat(4)2.37%
EPS beat(8)8
Avg EPS beat(8)1.52%
EPS beat(12)12
Avg EPS beat(12)2.42%
EPS beat(16)16
Avg EPS beat(16)5.95%
Revenue beat(2)0
Avg Revenue beat(2)-0.44%
Min Revenue beat(2)-0.45%
Max Revenue beat(2)-0.44%
Revenue beat(4)0
Avg Revenue beat(4)-0.7%
Min Revenue beat(4)-1.15%
Max Revenue beat(4)-0.44%
Revenue beat(8)3
Avg Revenue beat(8)-0.26%
Revenue beat(12)7
Avg Revenue beat(12)0.03%
Revenue beat(16)10
Avg Revenue beat(16)0.48%
PT rev (1m)-0.24%
PT rev (3m)1.36%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.4%
EPS NY rev (1m)0%
EPS NY rev (3m)0.48%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.17%
Revenue NY rev (1m)0.4%
Revenue NY rev (3m)-0.1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.96 | ||
| Fwd PE | 28.97 | ||
| P/S | 6.23 | ||
| P/FCF | 33.3 | ||
| P/OCF | 28.79 | ||
| P/B | 26.32 | ||
| P/tB | 139.5 | ||
| EV/EBITDA | 21.42 |
EPS(TTM)7.77
EY3.13%
EPS(NY)8.57
Fwd EY3.45%
FCF(TTM)7.46
FCFY3%
OCF(TTM)8.63
OCFY3.47%
SpS39.84
BVpS9.44
TBVpS1.78
PEG (NY)3.08
PEG (5Y)2.91
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.9% | ||
| ROE | 82.51% | ||
| ROCE | 53.74% | ||
| ROIC | 41.35% | ||
| ROICexc | 64.13% | ||
| ROICexgc | 167.21% | ||
| OM | 25.98% | ||
| PM (TTM) | 19.54% | ||
| GM | 45.62% | ||
| FCFM | 18.72% |
ROA(3y)6.09%
ROA(5y)5.98%
ROE(3y)90.39%
ROE(5y)71.98%
ROIC(3y)40.21%
ROIC(5y)34.27%
ROICexc(3y)55.5%
ROICexc(5y)46.4%
ROICexgc(3y)138.42%
ROICexgc(5y)107.72%
ROCE(3y)52.26%
ROCE(5y)44.53%
ROICexcg growth 3Y43.75%
ROICexcg growth 5Y22.92%
ROICexc growth 3Y26.59%
ROICexc growth 5Y15.01%
OM growth 3Y5.45%
OM growth 5Y3.92%
PM growth 3Y4.1%
PM growth 5Y3.75%
GM growth 3Y2.32%
GM growth 5Y1.05%
F-Score8
Asset Turnover0.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.66 | ||
| Debt/FCF | 0.83 | ||
| Debt/EBITDA | 0.54 | ||
| Cap/Depr | 100.27% | ||
| Cap/Sales | 2.93% | ||
| Interest Coverage | 14.1 | ||
| Cash Conversion | 74.9% | ||
| Profit Quality | 95.79% | ||
| Current Ratio | 1.01 | ||
| Quick Ratio | 1.01 | ||
| Altman-Z | 2.71 |
F-Score8
WACC8.76%
ROIC/WACC4.72
Cap/Depr(3y)103.92%
Cap/Depr(5y)107.85%
Cap/Sales(3y)3.15%
Cap/Sales(5y)3.41%
Profit Quality(3y)96.23%
Profit Quality(5y)97.19%
High Growth Momentum
Growth
EPS 1Y (TTM)11.54%
EPS 3Y15.1%
EPS 5Y10.99%
EPS Q2Q%10.58%
EPS Next Y10.37%
EPS Next 2Y9.51%
EPS Next 3Y9.18%
EPS Next 5Y8.11%
Revenue 1Y (TTM)6.61%
Revenue growth 3Y8.57%
Revenue growth 5Y6.36%
Sales Q2Q%6.49%
Revenue Next Year5.53%
Revenue Next 2Y5.54%
Revenue Next 3Y5.59%
Revenue Next 5Y5.3%
EBIT growth 1Y10.68%
EBIT growth 3Y14.48%
EBIT growth 5Y10.53%
EBIT Next Year18.69%
EBIT Next 3Y10.15%
EBIT Next 5Y8.46%
FCF growth 1Y-1.15%
FCF growth 3Y11.58%
FCF growth 5Y11.12%
OCF growth 1Y-1.19%
OCF growth 3Y10.36%
OCF growth 5Y9.11%