Loading...

You're on the old version of Simply Wall St. We will no longer be supporting this site, so we recommend you switch to our brand new platform.

Automatic Data Processing

Nasdaq:ADP
Snowflake Description

Solid track record with excellent balance sheet and pays a dividend.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
ADP
Nasdaq
$59B
Market Cap
  1. Home
  2. US
  3. Software
Company description

Automatic Data Processing, Inc. provides cloud-based human capital management solutions worldwide. The last earnings update was 68 days ago. More info.


Add to Portfolio Compare Print
  • Automatic Data Processing has significant price volatility in the past 3 months.
ADP Share Price and Events
7 Day Returns
5.6%
NasdaqGS:ADP
4.3%
US IT
2.4%
US Market
1 Year Returns
-14.6%
NasdaqGS:ADP
-1.2%
US IT
-10%
US Market
ADP Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Automatic Data Processing (ADP) 5.6% -9.3% -20% -14.6% 34.3% 59.7%
US IT 4.3% -10% -15.6% -1.2% 59.3% 77.7%
US Market 2.4% -11% -19.4% -10% 9.6% 21.1%
1 Year Return vs Industry and Market
  • ADP underperformed the IT industry which returned -1.2% over the past year.
  • ADP underperformed the Market in United States of America which returned -10% over the past year.
Price Volatility
ADP
Industry
5yr Volatility vs Market

Value

 Is Automatic Data Processing undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Automatic Data Processing to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Automatic Data Processing.

NasdaqGS:ADP Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 15 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 7%
Perpetual Growth Rate 10-Year US Government Bond Rate 1.7%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NasdaqGS:ADP
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 1.7%
Equity Risk Premium S&P Global 5.4%
IT Unlevered Beta Simply Wall St/ S&P Global 0.91
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.913 (1 + (1- 21%) (4.18%))
0.962
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
0.96
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 1.74% + (0.962 * 5.44%)
6.97%

Discounted Cash Flow Calculation for NasdaqGS:ADP using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Automatic Data Processing is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

Note: Free cash flow to equity valuations ignore the company's cash or debt.

NasdaqGS:ADP DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (USD, Millions) Source Present Value
Discounted (@ 6.97%)
2020 2,813.40 Analyst x3 2,630.01
2021 3,171.13 Analyst x4 2,771.19
2022 4,573.00 Analyst x1 3,735.77
2023 5,428.65 Est @ 18.71% 4,145.69
2024 6,168.02 Est @ 13.62% 4,403.29
2025 6,788.26 Est @ 10.06% 4,530.19
2026 7,301.52 Est @ 7.56% 4,555.10
2027 7,726.08 Est @ 5.81% 4,505.78
2028 8,080.89 Est @ 4.59% 4,405.51
2029 8,382.84 Est @ 3.74% 4,272.23
Present value of next 10 years cash flows $39,954.00
NasdaqGS:ADP DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2029 × (1 + g) ÷ (Discount Rate – g)
= $8,382.84 × (1 + 1.74%) ÷ (6.97% – 1.74%)
$162,982.97
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= $162,982.97 ÷ (1 + 6.97%)10
$83,062.56
NasdaqGS:ADP Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= $39,954.00 + $83,062.56
$123,016.56
Equity Value per Share
(USD)
= Total value / Shares Outstanding
= $123,016.56 / 431.75
$284.92
NasdaqGS:ADP Discount to Share Price
Calculation Result
Value per share (USD) From above. $284.92
Current discount Discount to share price of $136.96
= -1 x ($136.96 - $284.92) / $284.92
51.9%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

Current Discount
Amount off the current price Automatic Data Processing is available for.
Intrinsic value
>50%
Share price is $136.96 vs Future cash flow value of $284.92
Current Discount Checks
For Automatic Data Processing to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • Automatic Data Processing's share price is below the future cash flow value, and at a moderate discount (> 20%).
  • Automatic Data Processing's share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Automatic Data Processing's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Automatic Data Processing's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NasdaqGS:ADP PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-12-31) in USD $5.69
NasdaqGS:ADP Share Price ** NasdaqGS (2020-04-07) in USD $136.96
United States of America IT Industry PE Ratio Median Figure of 71 Publicly-Listed IT Companies 24.84x
United States of America Market PE Ratio Median Figure of 2,948 Publicly-Listed Companies 12.95x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Automatic Data Processing.

NasdaqGS:ADP PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NasdaqGS:ADP Share Price ÷ EPS (both in USD)

= 136.96 ÷ 5.69

24.07x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Automatic Data Processing is good value based on earnings compared to the US IT industry average.
  • Automatic Data Processing is overvalued based on earnings compared to the United States of America market.
Price based on expected Growth
Does Automatic Data Processing's expected growth come at a high price?
Raw Data
NasdaqGS:ADP PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 24.07x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 15 Analysts
11.2%per year
United States of America IT Industry PEG Ratio Median Figure of 60 Publicly-Listed IT Companies 1.89x
United States of America Market PEG Ratio Median Figure of 2,010 Publicly-Listed Companies 0.92x

*Line of best fit is calculated by linear regression .

NasdaqGS:ADP PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 24.07x ÷ 11.2%

2.14x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Automatic Data Processing is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Automatic Data Processing's assets?
Raw Data
NasdaqGS:ADP PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-12-31) in USD $12.42
NasdaqGS:ADP Share Price * NasdaqGS (2020-04-07) in USD $136.96
United States of America IT Industry PB Ratio Median Figure of 116 Publicly-Listed IT Companies 2.88x
United States of America Market PB Ratio Median Figure of 5,162 Publicly-Listed Companies 1.26x
NasdaqGS:ADP PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NasdaqGS:ADP Share Price ÷ Book Value per Share (both in USD)

= 136.96 ÷ 12.42

11.02x

* Primary Listing of Automatic Data Processing.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Automatic Data Processing is overvalued based on assets compared to the US IT industry average.
X
Value checks
We assess Automatic Data Processing's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the IT industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the IT industry average (and greater than 0)? (1 check)
  5. Automatic Data Processing has a total score of 3/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

 How is Automatic Data Processing expected to perform in the next 1 to 3 years based on estimates from 15 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
11.2%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Automatic Data Processing expected to grow at an attractive rate?
  • Automatic Data Processing's earnings growth is expected to exceed the low risk savings rate of 1.7%.
Growth vs Market Checks
  • Automatic Data Processing's earnings growth is positive but not above the United States of America market average.
  • Automatic Data Processing's revenue growth is positive but not above the United States of America market average.
Annual Growth Rates Comparison
Raw Data
NasdaqGS:ADP Future Growth Rates Data Sources
Data Point Source Value (per year)
NasdaqGS:ADP Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 15 Analysts 11.2%
NasdaqGS:ADP Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 15 Analysts 6.1%
United States of America IT Industry Earnings Growth Rate Market Cap Weighted Average 16.4%
United States of America IT Industry Revenue Growth Rate Market Cap Weighted Average 9.7%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 13.3%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 7%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NasdaqGS:ADP Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 15 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NasdaqGS:ADP Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2022-06-30 16,876 4,839 3,274 5
2021-06-30 15,654 3,511 2,884 15
2020-06-30 14,863 2,853 2,617 14
2020-04-08
NasdaqGS:ADP Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2019-12-31 14,538 2,888 2,463
2019-09-30 14,361 2,972 2,370
2019-06-30 14,175 2,688 2,293
2019-03-31 13,966 2,661 1,958
2018-12-31 13,815 2,772 1,866
2018-09-30 13,561 2,420 1,978
2018-06-30 13,328 2,515 1,885
2018-03-31 13,076 2,267 2,010
2017-12-31 12,791 1,960 1,937
2017-09-30 12,540 2,041 1,777
2017-06-30 12,372 2,126 1,788
2017-03-31 12,213 2,332 1,750

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Automatic Data Processing's earnings are expected to grow by 11.2% yearly, however this is not considered high growth (20% yearly).
  • Automatic Data Processing's revenue is expected to grow by 6.1% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NasdaqGS:ADP Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 15 Analyst Estimates (S&P Global) See Below

All data from Automatic Data Processing Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqGS:ADP Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2022-06-30 7.63 7.67 7.60 3.00
2021-06-30 6.64 7.30 5.82 10.00
2020-06-30 5.99 6.16 5.68 9.00
2020-04-08
NasdaqGS:ADP Past Financials Data
Date (Data in USD Millions) EPS *
2019-12-31 5.69
2019-09-30 5.46
2019-06-30 5.27
2019-03-31 4.49
2018-12-31 4.26
2018-09-30 4.50
2018-06-30 4.28
2018-03-31 4.54
2017-12-31 4.37
2017-09-30 3.99
2017-06-30 3.99
2017-03-31 3.89

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Automatic Data Processing is expected to make outstanding use of shareholders’ funds in the future (Return on Equity greater than 40%).
X
Future performance checks
We assess Automatic Data Processing's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Automatic Data Processing has a total score of 2/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Automatic Data Processing performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Automatic Data Processing's growth in the last year to its industry (IT).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Automatic Data Processing's year on year earnings growth rate has been positive over the past 5 years.
  • Automatic Data Processing's 1-year earnings growth exceeds its 5-year average (32% vs 12%)
  • Automatic Data Processing's earnings growth has exceeded the US IT industry average in the past year (32% vs 13.7%).
Earnings and Revenue History
Automatic Data Processing's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Automatic Data Processing Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqGS:ADP Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-12-31 14,537.70 2,463.20 3,026.40
2019-09-30 14,360.60 2,369.80 3,016.40
2019-06-30 14,175.20 2,292.80 3,008.20
2019-03-31 13,966.30 1,958.20 2,961.80
2018-12-31 13,814.90 1,865.50 2,940.90
2018-09-30 13,560.80 1,977.70 2,914.20
2018-06-30 13,327.70 1,884.90 2,878.20
2018-03-31 13,076.40 2,009.80 2,878.40
2017-12-31 12,791.10 1,936.80 2,821.70
2017-09-30 12,540.10 1,777.30 2,757.90
2017-06-30 12,372.00 1,787.80 2,630.80
2017-03-31 12,213.20 1,749.60 2,629.10
2016-12-31 12,051.00 1,694.10 2,598.30
2016-09-30 11,870.70 1,524.60 2,584.50
2016-06-30 11,667.80 1,493.40 2,588.80
2016-03-31 11,464.00 1,468.40 2,591.90
2015-12-31 11,239.90 1,426.30 2,575.50
2015-09-30 11,086.40 1,417.40 2,536.90
2015-06-30 10,938.50 1,376.50 2,507.60
2015-03-31 10,789.60 1,349.90 2,450.80
2014-12-31 10,590.30 1,292.60 2,418.30
2014-09-30 10,430.50 1,274.30 2,408.60
2014-06-30 10,226.40 1,242.60 2,370.30
2014-03-31 10,483.60 1,236.20 2,431.30
2013-12-31 10,767.80 1,284.70 2,499.50
2013-09-30 11,012.10 1,320.50 2,543.70
2013-06-30 9,442.00 1,122.20 2,200.40

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Automatic Data Processing made outstanding use of shareholders’ funds last year (Return on Equity greater than 40%).
  • Automatic Data Processing used its assets less efficiently than the US IT industry average last year based on Return on Assets.
  • Automatic Data Processing has improved its use of capital last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Automatic Data Processing's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the IT industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Automatic Data Processing has a total score of 5/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Automatic Data Processing's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Automatic Data Processing's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Automatic Data Processing is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Automatic Data Processing's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Automatic Data Processing's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • Low level of unsold assets.
  • Debt is covered by short term assets, assets are 20.6x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Automatic Data Processing Company Filings, last reported 3 months ago.

NasdaqGS:ADP Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2019-12-31 5,364.40 2,004.60 1,507.60
2019-09-30 5,360.70 5,970.00 4,949.00
2019-06-30 5,399.90 2,264.20 1,959.70
2019-03-31 5,246.20 2,002.30 1,833.50
2018-12-31 4,763.90 3,208.30 2,789.00
2018-09-30 4,678.80 2,455.40 1,617.40
2018-06-30 4,735.90 2,002.40 2,173.30
2018-03-31 4,029.20 2,002.40 2,293.60
2017-12-31 3,931.20 2,002.40 1,776.60
2017-09-30 3,953.40 2,131.50 2,476.80
2017-06-30 3,977.00 2,002.40 2,783.60
2017-03-31 4,103.10 2,010.30 2,998.70
2016-12-31 3,815.10 2,002.50 2,746.20
2016-09-30 4,250.10 2,007.70 2,817.60
2016-06-30 4,481.60 2,007.70 3,214.60
2016-03-31 4,503.20 2,007.70 2,965.10
2015-12-31 4,206.20 1,994.80 2,821.80
2015-09-30 4,630.20 1,995.20 3,211.90
2015-06-30 4,808.50 9.20 1,665.90
2015-03-31 5,178.10 9.70 1,835.50
2014-12-31 5,492.20 10.30 1,952.70
2014-09-30 5,827.30 1,947.90 2,479.50
2014-06-30 6,670.20 2,184.50 1,416.60
2014-03-31 6,616.10 12.10 1,693.90
2013-12-31 6,258.50 12.60 1,288.90
2013-09-30 6,192.80 2,832.10 1,179.70
2013-06-30 6,189.90 260.60 1,726.40
  • Automatic Data Processing's level of debt (37.4%) compared to net worth is satisfactory (less than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (0.2% vs 37.4% today).
  • Debt is well covered by operating cash flow (144.1%, greater than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 115.2x coverage).
X
Financial health checks
We assess Automatic Data Processing's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Automatic Data Processing has a total score of 5/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is Automatic Data Processing's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
2.66%
Current annual income from Automatic Data Processing dividends. Estimated to be 2.6% next year.
If you bought $2,000 of Automatic Data Processing shares you are expected to receive $53 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Automatic Data Processing's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.93%).
  • Automatic Data Processing's dividend is below the markets top 25% of dividend payers in United States of America (5.46%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NasdaqGS:ADP Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 15 Analyst Estimates (S&P Global) See Below
United States of America IT Industry Average Dividend Yield Market Cap Weighted Average of 34 Stocks 1.5%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 1935 Stocks 2.9%
United States of America Minimum Threshold Dividend Yield 10th Percentile 1.1%
United States of America Bottom 25% Dividend Yield 25th Percentile 1.9%
United States of America Top 25% Dividend Yield 75th Percentile 5.5%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NasdaqGS:ADP Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
2022-06-30 3.82 5.00
2021-06-30 3.62 13.00
2020-06-30 3.38 12.00
2020-04-08
NasdaqGS:ADP Past Annualized Dividends Data
Date (Data in $) Dividend per share (annual) Avg. Yield (%)
2020-01-31 3.640 2.437
2020-01-29 3.640 2.111
2019-08-07 3.160 1.898
2019-04-03 3.160 1.935
2019-01-15 3.160 2.134
2018-11-06 3.160 2.301
2018-08-02 2.760 1.919
2018-04-11 2.760 2.123
2018-01-16 2.520 2.170
2017-11-07 2.520 2.190
2017-08-01 2.280 2.068
2017-04-05 2.280 2.230
2017-01-17 2.280 2.242
2016-11-08 2.280 2.317
2016-08-02 2.120 2.397
2016-04-06 2.120 2.366
2016-01-19 2.120 2.497
2015-11-10 2.120 2.515
2015-08-04 1.960 2.386
2015-04-08 1.960 2.334
2015-01-22 1.960 2.263
2014-11-11 1.960 2.316
2014-08-05 1.920 2.398
2014-04-09 1.920 2.437
2014-01-23 1.920 2.501
2013-11-12 1.920 2.420
2013-08-06 1.740 2.376
2013-04-10 1.740 2.507
2013-01-25 1.740 2.789
2012-11-13 1.740 3.026
2012-08-07 1.580 2.720
2012-04-25 1.580 2.897
2012-01-26 1.580 2.884
2011-11-08 1.580 2.997
2011-08-09 1.440 2.922
2011-04-28 1.440 2.731
2011-02-08 1.440 2.837
2010-11-09 1.440 3.060
2010-08-09 1.360 3.264
2010-04-29 1.360 3.284
2010-02-09 1.360 3.132
2009-11-10 1.360 3.193
2009-08-13 1.320 3.345
2009-04-30 1.320 3.637

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Dividends per share have been stable in the past 10 years.
  • Dividends per share have increased over the past 10 years.
Current Payout to shareholders
What portion of Automatic Data Processing's earnings are paid to the shareholders as a dividend.
  • Dividends paid are covered by earnings (1.7x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be covered by earnings (1.9x coverage).
X
Income/ dividend checks
We assess Automatic Data Processing's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 1.1%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Automatic Data Processing afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Automatic Data Processing has a total score of 5/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of Automatic Data Processing's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Carlos Rodriguez
COMPENSATION $19,000,187
AGE 55
TENURE AS CEO 8.4 years
CEO Bio

Mr. Carlos A. Rodriguez has been the Chief Executive Officer of Automatic Data Processing, Inc. since November 8, 2011 and has been its President since May 2011. Mr. Rodriguez served as the Chief Operating Officer of Automatic Data Processing Inc. from May 2011 to November 8, 2011. Mr. Rodriguez served as the President of Employer Services- National Account Services, ADP Canada, and GlobalView and Employer Services International at Automatic Data Processing, Inc. from March 2010 to May 2011. Mr. Rodriguez served as the President of Employer Services - Small Business Services Division of Automatic Data Processing, Inc. from 1999 to 2010. Having started his career at the company in 1999, Mr. Rodriguez previously served as president of several key businesses, including National Accounts Services, Employer Services International, Small Business Services, and Professional Employer Organization, giving him deep institutional knowledge across the Automatic Data Processing, Inc.’s business. He served as the President of TotalSource, Employer Services of ADP from 2000 to 2007. He joined ADP in 1999 through its acquisition of Vincam, where he served initially as Chief Financial Officer for a short period before becoming President of ADP TotalSource®. He has been a Director of Automatic Data Processing, Inc., since November 8, 2011. He serves as a Director of A-T Children's Project. He served as a Director at Hubbell Inc. since June 2009 until May 03, 2016. He is a Member of World 50, Inc. Mr. Rodriguez holds a BA in Government from Harvard College and an MBA from the Harvard Business School.

CEO Compensation
  • Carlos's compensation has been consistent with company performance over the past year, both up more than 20%.
  • Carlos's remuneration is higher than average for companies of similar size in United States of America.
Management Team Tenure

Average tenure and age of the Automatic Data Processing management team in years:

2.3
Average Tenure
50.5
Average Age
  • The tenure for the Automatic Data Processing management team is about average.
Management Team

Carlos Rodriguez

TITLE
CEO, President & Director
COMPENSATION
$19M
AGE
55
TENURE
8.4 yrs

Kathleen Winters

TITLE
Corporate Vice President & CFO
COMPENSATION
$2M
AGE
51
TENURE
1 yrs

Michael Bonarti

TITLE
Corporate VP
COMPENSATION
$4M
AGE
54
TENURE
9.8 yrs

Maria Black

TITLE
President of Worldwide Sales & Marketing
COMPENSATION
$4M
AGE
45
TENURE
0.2 yrs

Tom Perrotti

TITLE
Corporate Officer
COMPENSATION
$4M
AGE
50
TENURE
0.2 yrs

Brock Albinson

TITLE
Corporate Controller & Principal Accounting Officer
AGE
44
TENURE
5.1 yrs

Don Weinstein

TITLE
Corporate Vice President of Global Product & Technology
AGE
50
TENURE
1.8 yrs

Vipul Nagrath

TITLE
Global Chief Information Officer

Christian Greyenbuhl

TITLE
Vice President of Investor Relation
TENURE
4.3 yrs

Doug Politi

TITLE
President of Compliance Solutions
AGE
57
TENURE
2.3 yrs
Board of Directors Tenure

Average tenure and age of the Automatic Data Processing board of directors in years:

7.3
Average Tenure
62.5
Average Age
  • The tenure for the Automatic Data Processing board of directors is about average.
Board of Directors

John Jones

TITLE
Non-Executive Chairman of the Board
COMPENSATION
$500K
AGE
68
TENURE
4.4 yrs

Carlos Rodriguez

TITLE
CEO, President & Director
COMPENSATION
$19M
AGE
55
TENURE
8.4 yrs

Dick Clark

TITLE
Independent Director
COMPENSATION
$335K
AGE
73
TENURE
8.6 yrs

Sandra Wijnberg

TITLE
Independent Director
COMPENSATION
$335K
AGE
63
TENURE
3.8 yrs

Scott Powers

TITLE
Independent Director
COMPENSATION
$300K
AGE
59
TENURE
2 yrs

Eric Fast

TITLE
Independent Director
COMPENSATION
$319K
AGE
70
TENURE
12.6 yrs

Linda Gooden

TITLE
Independent Director
COMPENSATION
$325K
AGE
66
TENURE
11.2 yrs

Robert Hubbard

TITLE
Independent Director
COMPENSATION
$320K
AGE
60
TENURE
16.3 yrs

Mike Gregoire

TITLE
Independent Director
COMPENSATION
$355K
AGE
53
TENURE
6.3 yrs

Peter Bisson

TITLE
Independent Director
COMPENSATION
$320K
AGE
62
TENURE
4.7 yrs
Who owns this company?
Recent Insider Trading
  • No 3 month open market individual insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price ($) Value ($)
X
Management checks
We assess Automatic Data Processing's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Automatic Data Processing has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

Simply Wall St News

Announcing: Automatic Data Processing (NASDAQ:ADP) Stock Increased An Energizing 101% In The Last Five Years

Over half a decade, Automatic Data Processing managed to grow its earnings per share at 15% a year. … NasdaqGS:ADP Past and Future Earnings, September 2nd 2019 We know that Automatic Data Processing has improved its bottom line lately, but is it going to grow revenue? … We note that for Automatic Data Processing the TSR over the last 5 years was 157%, which is better than the share price return mentioned above.

Simply Wall St -

What Type Of Shareholder Owns Automatic Data Processing, Inc.'s (NASDAQ:ADP)?

Taking a look at our data on the ownership groups (below), it's seems that institutions own shares in the company. … View our latest analysis for Automatic Data Processing NasdaqGS:ADP Ownership Summary, August 26th 2019 What Does The Institutional Ownership Tell Us About Automatic Data Processing? … We can see that Automatic Data Processing does have institutional investors; and they hold 82% of the stock.

Simply Wall St -

Automatic Data Processing (NASDAQ:ADP) Has A Pretty Healthy Balance Sheet

Carrying virtually no net debt, Automatic Data Processing has a very light debt load indeed. … Automatic Data Processing has very little debt (net of cash), and boasts a debt to EBITDA ratio of 0.087 and EBIT of 95.4 times the interest expense. … And we also note warmly that Automatic Data Processing grew its EBIT by 17% last year, making its debt load easier to handle.

Simply Wall St -

Interested In Automatic Data Processing, Inc. (NASDAQ:ADP)? Here's What Its Recent Performance Looks Like

See our latest analysis for Automatic Data Processing Did ADP's recent earnings growth beat the long-term trend and the industry? … While Automatic Data Processing has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. … I suggest you continue to research Automatic Data Processing to get a more holistic view of the stock by looking at: Future Outlook: What are well-informed industry analysts predicting for ADP’s future growth?

Simply Wall St -

At US$164, Is Automatic Data Processing, Inc. (NASDAQ:ADP) Worth Looking At Closely?

Let’s take a look at Automatic Data Processing’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. … In addition to this, it seems like Automatic Data Processing’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. … ADP’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value.

Simply Wall St -

With A -3.6% Earnings Drop, Is Automatic Data Processing, Inc.'s (NASDAQ:ADP) A Concern?

Assessing Automatic Data Processing, Inc.'s (NASDAQ:ADP) past track record of performance is a useful exercise for investors. … Below, I assess ADP's latest performance announced on 30 September 2018 and evaluate these figures to its historical trend and industry movements. … Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 7.9%, indicating the rate at which ADP is growing has slowed down

Simply Wall St -

Automatic Data Processing Inc (NASDAQ:ADP): A Look At Return On Capital

and want to begin learning the link between Automatic Data Processing Inc (NASDAQ:ADP)’s return fundamentals and stock market performance. … Thus, to understand how your money can grow by investing in Automatic Data Processing, you need to look at what the company returns to owners for the use of their capital, which can be done in many ways but today we will use return on capital employed (ROCE) … Automatic Data Processing's Return On Capital Employed

Simply Wall St -

How Do Analysts See Automatic Data Processing Inc (NASDAQ:ADP) Performing In The Next Couple Of Years?

In June 2018, Automatic Data Processing Inc (NASDAQ:ADP) released its most recent earnings announcement, whicha

Simply Wall St -

What Should You Know About The Future Of Automatic Data Processing Inc's (NASDAQ:ADP)?

Based on Automatic Data Processing Inc's (NASDAQ:ADP) earnings update in June 2018,. … with earnings expected to grow by 38.15% in the upcoming year … the past 5-year average growth rate of 5.01%

Simply Wall St -

Why Automatic Data Processing Inc’s (NASDAQ:ADP) Cash Is A Factor You Need To Consider

Automatic Data Processing Inc (NASDAQ:ADP) shareholders, and potential investors, need to understand how much cash the business makes from its core operational activities, as well as how much is invested back into the business. … I’ve analysed below, the health and outlook of Automatic Data Processing’s cash flow, which will help you understand the stock from a cash standpoint. … Automatic Data Processing’s free cash flow (FCF) is the level of cash flow the business generates from its operational activities, after it reinvests in the company as capital expenditure.

Simply Wall St -

Company Info

Description

Automatic Data Processing, Inc. provides cloud-based human capital management solutions worldwide. It operates through two segments, Employer Services and Professional Employer Organization (PEO) Services. The Employer Services segment offers strategic, cloud-based platforms, and human resources (HR) outsourcing solutions. Its offerings include payroll, benefits administration, talent management, HR management, workforce management, insurance, retirement, and compliance services. The PEO Services segment provides HR outsourcing solutions through a co-employment model. This segment offers protection and compliance, talent engagement, comprehensive outsourcing, and recruitment process outsourcing services. The company was founded in 1949 and is headquartered in Roseland, New Jersey.

Details
Name: Automatic Data Processing, Inc.
ADP
Exchange: NasdaqGS
Founded: 1949
$59,133,062,353
431,754,252
Website: http://www.adp.com
Address: Automatic Data Processing, Inc.
One ADP Boulevard,
Roseland,
New Jersey, 07068,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NasdaqGS ADP Common Stock Nasdaq Global Select US USD 02. Jan 1968
DB ADP Common Stock Deutsche Boerse AG DE EUR 02. Jan 1968
LSE 0HJI Common Stock London Stock Exchange GB USD 02. Jan 1968
WBAG ADP Common Stock Wiener Boerse AG AT EUR 02. Jan 1968
SNSE ADP Common Stock Santiago Stock Exchange CL USD 02. Jan 1968
ETLX ADP Common Stock Eurotlx IT EUR 02. Jan 1968
BASE ADP CEDEAR EACH REP 1/2 ORD USD0.10 Buenos Aires Stock Exchange AR ARS 08. Dec 2000
BOVESPA ADPR34 BDR EACH REP 0.5 COM USD0.10 Bolsa de Valores de Sao Paulo BR BRL 17. May 2019
Number of employees
Current staff
Staff numbers
58,000
Automatic Data Processing employees.
Industry
Data Processing and Outsourced Services
Software
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2020/04/08 06:33
End of day share price update: 2020/04/07 00:00
Last estimates confirmation: 2020/03/27
Last earnings filing: 2020/01/31
Last earnings reported: 2019/12/31
Last annual earnings reported: 2019/06/30


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.