About Automatic Data Processing, Inc.
Automatic Data Processing, Inc. provides cloud-based human capital management (HCM) solutions worldwide. It operates in two segments, Employer Services and Professional Employer Organization (PEO). The Employer Services segment offers strategic, cloud-based platforms, and human resources (HR) outsourcing solutions. This segment's offerings include RUN Powered by ADP, a software platform for small business payroll, HR, and compliance; ADP Workforce Now, a HCM solution used across mid-sized and large businesses to manage employees; and ADP Lyric HCM, a solution for HR management, payroll, workforce management, talent, and data analytics. Its PEO Services segment provides HR outsourcing solutions under ADP TotalSource name to businesses through a co-employment model. This segment also provides guidance, user-friendly technology, comprehensive employee benefits, and a risk management, safety, and workers' compensation program. The company was founded in 1949 and is headquartered in Roseland, New Jersey.
Automatic Data Processing, Inc. (ADP) is a Technology company in the Software - Application industry with a market capitalisation of $106.6B. The stock trades at 24.50x trailing earnings and yields 2.54%.
- Sector
- Technology
- Industry
- Software - Application
- Market cap
- $106.6B
- P/E ratio
- 24.50
- Forward P/E
- 20.02
- EPS (TTM)
- $10.95
- Revenue (TTM)
- $21.9B
- Free cash flow
- $5.2B
- Profit margin
- 20.1%
- Dividend yield
- 2.54%
- Beta
- 0.83
- Shares outstanding
- 397.3M
Financial health: Fair6.1/10
3 strengths, 1 concern. Weakest points: peg ratio.
- Debt to equity: 0.82 (Watch, benchmark < 0.5) — Debt of 0.82x equity is moderate against the 0.5x benchmark. It has been broadly flat over the last 4 years.
- Current ratio: 1.05 (Watch, benchmark > 1.5) — Short-term assets cover 1.05x short-term liabilities, against Graham's 1.5x floor. It has been broadly flat over the last 4 years.
- Return on equity: 72.2% (Strong, benchmark > 15%) — Earns 72.2% on shareholder equity, comfortably past the > 15% mark.
- Gross margin: 48.6% (Strong, benchmark > 40%) — Keeps 48.6% of revenue after the direct cost of sales, comfortably past the > 40% mark.
- Net margin: 20.1% (Strong, benchmark > 10%) — Turns 20.1% of revenue into profit, comfortably past the > 10% mark.
- Revenue growth: 6.8% (Watch, benchmark > 10%) — Revenue changed 6.8% year on year, short of the > 10% mark.
- Earnings growth: 9.8% (Watch, benchmark > 10%) — Earnings changed 9.8% year on year, short of the > 10% mark.
- PEG ratio: 2.49 (Concern, benchmark < 1) — At 2.49, the price looks expensive relative to expected growth — Lynch treated 1.0 as fair value.
- Payout ratio: 60.7% (Watch, benchmark < 60%) — Pays out 60.7% of earnings as dividends — above the level usually considered sustainable.