258.18 USD
+1.19 (+0.46%)
We assign a fundamental rating of 6 out of 10 to ADP. ADP was compared to 88 industry peers in the Professional Services industry. ADP scores excellent on profitability, but there are some minor concerns on its financial health. ADP does not seem to be growing, but still is valued expensively. Finally ADP also has an excellent dividend rating. These ratings would make ADP suitable for dividend investing!
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.
- Each year in the past 5 years ADP has been profitable.
- In the past 5 years ADP always reported a positive cash flow from operatings.
1.2 Ratios
- With a decent Return On Assets value of 7.61%, ADP is doing good in the industry, outperforming 73.86% of the companies in the same industry.
- The Return On Equity of ADP (64.90%) is better than 95.45% of its industry peers.
- With an excellent Return On Invested Capital value of 24.00%, ADP belongs to the best of the industry, outperforming 93.18% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for ADP is significantly above the industry average of 11.85%.
- The 3 year average ROIC (36.13%) for ADP is well above the current ROIC(24.00%). The reason for the recent decline needs to be investigated.
| 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
- ADP's Profit Margin of 19.79% is amongst the best of the industry. ADP outperforms 87.50% of its industry peers.
- In the last couple of years the Profit Margin of ADP has grown nicely.
- With an excellent Operating Margin value of 26.27%, ADP belongs to the best of the industry, outperforming 92.05% of the companies in the same industry.
- ADP's Operating Margin has improved in the last couple of years.
- The Gross Margin of ADP (47.26%) is better than 63.64% of its industry peers.
- 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
- 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
- ADP has an Altman-Z score of 2.73. This is not the best score and indicates that ADP is in the grey zone with still only limited risk for bankruptcy at the moment.
- ADP's Altman-Z score of 2.73 is in line compared to the rest of the industry. ADP outperforms 51.14% of its industry peers.
- The Debt to FCF ratio of ADP is 2.18, which is a good value as it means it would take ADP, 2.18 years of fcf income to pay off all of its debts.
- ADP has a better Debt to FCF ratio (2.18) than 71.59% of its industry peers.
- A Debt/Equity ratio of 1.44 is on the high side and indicates that ADP has dependencies on debt financing.
- The Debt to Equity ratio of ADP (1.44) is worse than 73.86% of its industry peers.
- 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/WACC2.74
WACC8.76%
2.3 Liquidity
- A Current Ratio of 1.05 indicates that ADP should not have too much problems paying its short term obligations.
- With a Current ratio value of 1.05, ADP is not doing good in the industry: 71.59% 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's Quick ratio of 1.05 is on the low side compared to the rest of the industry. ADP is outperformed by 71.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.05 | ||
| Quick Ratio | 1.05 |
3. Growth
3.1 Past
- ADP shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.74%.
- 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%.
- Measured over the past years, ADP shows a small growth in Revenue. The Revenue has been growing by 7.10% on average per year.
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
- ADP is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.91% yearly.
- ADP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.68% yearly.
EPS Next Y10.23%
EPS Next 2Y9.84%
EPS Next 3Y9.55%
EPS Next 5Y7.91%
Revenue Next Year6.24%
Revenue Next 2Y6.01%
Revenue Next 3Y5.97%
Revenue Next 5Y5.68%
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
- ADP is valuated quite expensively with a Price/Earnings ratio of 25.41.
- The rest of the industry has a similar Price/Earnings ratio as ADP.
- The average S&P500 Price/Earnings ratio is at 27.32. ADP is around the same levels.
- Based on the Price/Forward Earnings ratio of 21.40, the valuation of ADP can be described as rather expensive.
- The rest of the industry has a similar Price/Forward Earnings ratio as ADP.
- ADP is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 24.30, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.41 | ||
| Fwd PE | 21.4 |
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.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of ADP indicates a somewhat cheap valuation: ADP is cheaper than 64.77% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.81 | ||
| EV/EBITDA | 15.54 |
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.
- The excellent profitability rating of ADP may justify a higher PE ratio.
PEG (NY)2.48
PEG (5Y)2.3
EPS Next 2Y9.84%
EPS Next 3Y9.55%
5. Dividend
5.1 Amount
- ADP has a Yearly Dividend Yield of 2.61%.
- Compared to an average industry Dividend Yield of 1.41, ADP pays a better dividend. On top of this ADP pays more dividend than 86.36% of the companies listed in the same industry.
- ADP's Dividend Yield is a higher than the S&P500 average which is at 1.86.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.61% |
5.2 History
- The dividend of ADP is nicely growing with an annual growth rate of 11.62%!
- 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.
- The dividend of ADP is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP59.3%
EPS Next 2Y9.84%
EPS Next 3Y9.55%
NASDAQ:ADP (1/22/2026, 11:50:06 AM)
258.18
+1.19 (+0.46%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)10-29 2025-10-29/bmo
Earnings (Next)01-28 2026-01-28/bmo
Inst Owners86.82%
Inst Owner Change-0.1%
Ins Owners0.1%
Ins Owner Change3.17%
Market Cap104.42B
Revenue(TTM)20.90B
Net Income(TTM)4.14B
Analysts55
Price Target296.24 (14.74%)
Short Float %1.72%
Short Ratio3.11
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.61% |
Yearly Dividend5.9
Dividend Growth(5Y)11.62%
DP59.3%
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)0.73%
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)-0.4%
PT rev (3m)-8.23%
EPS NQ rev (1m)0.03%
EPS NQ rev (3m)-1%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.07%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)-0.35%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.41 | ||
| Fwd PE | 21.4 | ||
| P/S | 5 | ||
| P/FCF | 24.81 | ||
| P/OCF | 21.95 | ||
| P/B | 16.38 | ||
| P/tB | 69.59 | ||
| EV/EBITDA | 15.54 |
EPS(TTM)10.16
EY3.94%
EPS(NY)12.06
Fwd EY4.67%
FCF(TTM)10.41
FCFY4.03%
OCF(TTM)11.76
OCFY4.56%
SpS51.68
BVpS15.76
TBVpS3.71
PEG (NY)2.48
PEG (5Y)2.3
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
WACC8.76%
ROIC/WACC2.74
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 5Y7.91%
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%.