Automatic Data Processing, Inc.
Automatic Data Processing, Inc. (ADP) is a large-cap provider of payroll, human capital management (HCM), benefits administration and outsourcing services for businesses. It combines cloud-based software, data analytics and outsourcing to handle payroll processing, HR administration, tax filing and compliance. ADP’s revenue mix—subscription fees and services—tends to produce recurring cash flow, and its market capitalisation (about $115.0bn) reflects a broad client base and scale. Investors often watch ADP for steady revenue, margin improvement from technology investments, and a history of dividend payments, but past performance is not a guide to the future. Key risks include competition from cloud-native HR platforms, regulatory and tax complexity in multiple jurisdictions, and sensitivity to economic cycles that affect employment levels. This content is for educational purposes only and not personal financial advice; suitability depends on your circumstances and you should consult a professional before investing.
Why It's Moving
ADP boosts dividend for 51st straight year, embedding new healthcare tools for small businesses.
Automatic Data Processing announced a quarterly dividend hike to $1.70 per share, payable January 1 to shareholders of record December 12, marking its 51st consecutive annual increase and signaling confidence in sustained earnings growth. The company also integrated Thatch's ICHRA platform into its RUN software, streamlining health benefits for over 900,000 small business clients amid a choppy job market.
- Dividend jumps 10% from $1.54, yielding 2.6% annualized with a sustainable 60.81% payout ratio, backed by 12% average EPS growth over five years.
- Seamless Thatch integration automates ICHRA quoting, enrollment, and payroll deductions in RUN, easing healthcare access for small firms.
- Recent employment data shows 32,000 private jobs shed in November, with small businesses hit hardest, yet ADP's platforms position it to support clients navigating labor slowdowns.
ADP boosts dividend for 51st straight year, embedding new healthcare tools for small businesses.
Automatic Data Processing announced a quarterly dividend hike to $1.70 per share, payable January 1 to shareholders of record December 12, marking its 51st consecutive annual increase and signaling confidence in sustained earnings growth. The company also integrated Thatch's ICHRA platform into its RUN software, streamlining health benefits for over 900,000 small business clients amid a choppy job market.
- Dividend jumps 10% from $1.54, yielding 2.6% annualized with a sustainable 60.81% payout ratio, backed by 12% average EPS growth over five years.
- Seamless Thatch integration automates ICHRA quoting, enrollment, and payroll deductions in RUN, easing healthcare access for small firms.
- Recent employment data shows 32,000 private jobs shed in November, with small businesses hit hardest, yet ADP's platforms position it to support clients navigating labor slowdowns.
Stock Performance Snapshot
Analyst Rating
Analysts suggest holding ADP's stock with a target price of $286.15, indicating moderate growth potential.
Financial Health
Automatic Data Processing is showing strong revenue, cash flow, and profitability, indicating solid financial health.
Dividend
ADP's dividend yield of 2.26% provides a moderate return to investors seeking dividends. If you invested $1000 you would be paid $22.60 a year in dividends (based on the last 12 months).
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Explore BasketWhy You’ll Want to Watch This Stock
Recurring revenue model
Subscription and service fees provide steady cash flow and potential margin stability, though growth depends on client retention and pricing.
Global client base
Serving employers worldwide diversifies revenue but adds regulatory and tax complexity across jurisdictions, which can affect costs.
Tech and data focus
Investments in cloud platforms and analytics can enhance cross-sell and retention, though competition and execution risks remain.
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