253.035 USD
-4.2 (-1.63%)
We assign a fundamental rating of 6 out of 10 to ADP. ADP was compared to 86 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 valued expensive and it does not seem to be growing. ADP also has an excellent dividend rating. These ratings could make ADP a good candidate for dividend investing.
1. Profitability
1.1 Basic Checks
In the past year ADP was profitable.
ADP had a positive operating cash flow in the past year.
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
With a decent Return On Assets value of 7.61%, ADP is doing good in the industry, outperforming 73.26% of the companies in the same industry.
ADP has a better Return On Equity (64.90%) than 95.35% of its industry peers.
ADP has a Return On Invested Capital of 24.00%. This is amongst the best in the industry. ADP outperforms 93.02% 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 12.04%.
The last Return On Invested Capital (24.00%) 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 | 7.61% | ||
| ROE | 64.9% | ||
| ROIC | 24% |
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
With an excellent Profit Margin value of 19.79%, ADP belongs to the best of the industry, outperforming 87.21% of the companies in the same industry.
ADP's Profit Margin has improved in the last couple of years.
The Operating Margin of ADP (26.27%) is better than 91.86% of its industry peers.
ADP's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 47.26%, ADP is doing good in the industry, outperforming 62.79% 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 | 26.27% | ||
| PM (TTM) | 19.79% | ||
| GM | 47.26% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so 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.
ADP has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.73 indicates that ADP is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.73, ADP perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
ADP has a debt to FCF ratio of 2.18. This is a good value and a sign of high solvency as ADP would need 2.18 years to pay back of all of its debts.
ADP's Debt to FCF ratio of 2.18 is fine compared to the rest of the industry. ADP outperforms 70.93% of its industry peers.
ADP has a Debt/Equity ratio of 1.44. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.44, ADP is not doing good in the industry: 75.58% of the companies in the same industry are doing better.
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 | 1.44 | ||
| Debt/FCF | 2.18 | ||
| Altman-Z | 2.73 |
ROIC/WACC2.78
WACC8.65%
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 is not doing good in the industry: 73.26% of the companies in the same industry are doing better.
ADP has a Quick 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.
ADP has a Quick ratio of 1.05. This is in the lower half of the industry: ADP underperforms 73.26% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.05 | ||
| Quick Ratio | 1.05 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.74% over the past year.
The Earnings Per Share has been growing by 11.05% on average over the past years. This is quite good.
Looking at the last year, ADP shows a small growth in Revenue. The Revenue has grown by 7.07% in the last 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)7.74%
EPS 3Y12.57%
EPS 5Y11.05%
EPS Q2Q%6.87%
Revenue 1Y (TTM)7.07%
Revenue growth 3Y7.61%
Revenue growth 5Y7.1%
Sales Q2Q%7.09%
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 7.81% on average per year.
The Revenue is expected to grow by 5.68% on average over the next years.
EPS Next Y10.23%
EPS Next 2Y9.84%
EPS Next 3Y9.55%
EPS Next 5Y7.81%
Revenue Next Year6.24%
Revenue Next 2Y6.01%
Revenue Next 3Y5.97%
Revenue Next 5Y5.68%
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
A Price/Earnings ratio of 24.91 indicates a rather expensive valuation of ADP.
Compared to the rest of the industry, the Price/Earnings ratio of ADP is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 26.51. ADP is around the same levels.
The Price/Forward Earnings ratio is 20.97, which indicates a rather expensive current valuation of ADP.
ADP's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 23.13. ADP is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.91 | ||
| Fwd PE | 20.97 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as ADP.
ADP's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ADP is cheaper than 62.79% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.31 | ||
| EV/EBITDA | 15.55 |
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)2.43
PEG (5Y)2.25
EPS Next 2Y9.84%
EPS Next 3Y9.55%
5. Dividend
5.1 Amount
ADP has a Yearly Dividend Yield of 2.63%.
ADP's Dividend Yield is rather good when compared to the industry average which is at 1.59. ADP pays more dividend than 84.88% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.00, ADP pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.63% |
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
59.30% 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.
DP59.3%
EPS Next 2Y9.84%
EPS Next 3Y9.55%
NASDAQ:ADP (1/2/2026, 10:29:50 AM)
253.035
-4.2 (-1.63%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners86.7%
Inst Owner Change-0.39%
Ins Owners0.1%
Ins Owner Change3.33%
Market Cap102.34B
Revenue(TTM)20.90B
Net Income(TTM)4.14B
Analysts65.71
Price Target296.24 (17.07%)
Short Float %1.89%
Short Ratio3.34
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.63% |
Yearly Dividend5.9
Dividend Growth(5Y)11.62%
DP59.3%
Div Incr Years26
Div Non Decr Years26
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)0.73%
Min EPS beat(2)0.35%
Max EPS beat(2)1.1%
EPS beat(4)4
Avg EPS beat(4)1.2%
Min EPS beat(4)0.35%
Max EPS beat(4)1.85%
EPS beat(8)8
Avg EPS beat(8)1.6%
EPS beat(12)12
Avg EPS beat(12)1.57%
EPS beat(16)16
Avg EPS beat(16)1.79%
Revenue beat(2)1
Avg Revenue beat(2)0.21%
Min Revenue beat(2)-0.23%
Max Revenue beat(2)0.64%
Revenue beat(4)3
Avg Revenue beat(4)0.27%
Min Revenue beat(4)-0.23%
Max Revenue beat(4)0.64%
Revenue beat(8)4
Avg Revenue beat(8)-0.04%
Revenue beat(12)6
Avg Revenue beat(12)-0.09%
Revenue beat(16)10
Avg Revenue beat(16)0.04%
PT rev (1m)-1.05%
PT rev (3m)-8.88%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.02%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.07%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)-0.37%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.03%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.91 | ||
| Fwd PE | 20.97 | ||
| P/S | 4.9 | ||
| P/FCF | 24.31 | ||
| P/OCF | 21.51 | ||
| P/B | 16.06 | ||
| P/tB | 68.2 | ||
| EV/EBITDA | 15.55 |
EPS(TTM)10.16
EY4.02%
EPS(NY)12.06
Fwd EY4.77%
FCF(TTM)10.41
FCFY4.11%
OCF(TTM)11.76
OCFY4.65%
SpS51.68
BVpS15.76
TBVpS3.71
PEG (NY)2.43
PEG (5Y)2.25
Graham Number60.02
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.61% | ||
| ROE | 64.9% | ||
| ROCE | 44.33% | ||
| ROIC | 24% | ||
| ROICexc | 43.76% | ||
| ROICexgc | 88.38% | ||
| OM | 26.27% | ||
| PM (TTM) | 19.79% | ||
| GM | 47.26% | ||
| FCFM | 20.14% |
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 Turnover0.38
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.44 | ||
| Debt/FCF | 2.18 | ||
| Debt/EBITDA | 1.51 | ||
| Cap/Depr | 92.82% | ||
| Cap/Sales | 2.62% | ||
| Interest Coverage | 13.19 | ||
| Cash Conversion | 78.22% | ||
| Profit Quality | 101.77% | ||
| Current Ratio | 1.05 | ||
| Quick Ratio | 1.05 | ||
| Altman-Z | 2.73 |
F-Score6
WACC8.65%
ROIC/WACC2.78
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)7.74%
EPS 3Y12.57%
EPS 5Y11.05%
EPS Q2Q%6.87%
EPS Next Y10.23%
EPS Next 2Y9.84%
EPS Next 3Y9.55%
EPS Next 5Y7.81%
Revenue 1Y (TTM)7.07%
Revenue growth 3Y7.61%
Revenue growth 5Y7.1%
Sales Q2Q%7.09%
Revenue Next Year6.24%
Revenue Next 2Y6.01%
Revenue Next 3Y5.97%
Revenue Next 5Y5.68%
EBIT growth 1Y6.75%
EBIT growth 3Y12.61%
EBIT growth 5Y11.57%
EBIT Next Year18.67%
EBIT Next 3Y11.07%
EBIT Next 5Y10.37%
FCF growth 1Y29.53%
FCF growth 3Y19.94%
FCF growth 5Y12.76%
OCF growth 1Y24.68%
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 10.23% 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 59.3%.