Automatic Data Processing, Inc. (ADP) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

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Comparison

Company

Score

Quality

Valuation

Financial

Technical

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Automatic Data Processing, Inc.

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Why is Automatic Data Processing, Inc. ?

High Management Efficiency with a high ROCE of 78.05%

Strong ability to service debt as the company has a low Debt to EBITDA ratio of 0.18 times

Healthy long term growth as Net Sales has grown by an annual rate of 7.10% and Operating profit at 11.51%

Flat results in Jun 25

ROCE(HY) Lowest at 76%
INTEREST(Q) At USD 123.1 MM has Grown at 67.71%

With ROCE of 73.05%, it has a fair valuation with a 28.23 Enterprise value to Capital Employed

The stock is trading at a fair value compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -15.87%, its profits have risen by 7.9% ; the PEG ratio of the company is 5.7

High Institutional Holdings at 83.42%

These investors have better capability and resources to analyse fundamentals of companies than most retail investors.

Below par performance in long term as well as near term

Along with generating -15.87% returns in the last 1 year, the stock has also underperformed S&P 500 in the last 3 years, 1 year and 3 months

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Automatic Data Processing, Inc. should be less than 10%
Overall Portfolio exposure to Commercial Services & Supplies should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Commercial Services & Supplies)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Automatic Data Processing, Inc. for you?

Low Risk, Low Return

Absolute

Risk Adjusted

Volatility

Automatic Data Processing, Inc.

-14.55%

0.19

19.96%

S&P 500

13.22%

0.61

20.17%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

7.10%

EBIT Growth (5y)

11.51%

EBIT to Interest (avg)

31.23

Debt to EBITDA (avg)

0.18

Net Debt to Equity (avg)

0.24

Sales to Capital Employed (avg)

2.22

Tax Ratio

23.24%

Dividend Payout Ratio

60.31%

Pledged Shares

Institutional Holding

83.42%

ROCE (avg)

78.05%

ROE (avg)

69.91%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

34.75

EV to EBIT

38.64

EV to EBITDA

34.87

EV to Capital Employed

28.23

EV to Sales

10.14

PEG Ratio

5.70

Dividend Yield

1.19%

ROCE (Latest)

73.05%

ROE (Latest)

68.23%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bearish

Mildly Bearish

RSI

Bullish

No Signal

Bollinger Bands

Mildly Bearish

Bearish

Moving Averages

Bearish (Daily)

KST

Bearish

Mildly Bearish

Dow Theory

Mildly Bearish

OBV

No Trend

Mildly Bullish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

6What is working for the Company

OPERATING CASH FLOW(Y)

Highest at USD 4,939.7 MM

DIVIDEND PER SHARE(HY)

Highest at USD 5.87

RAW MATERIAL COST(Y)

Fallen by -0.68% (YoY

CASH AND EQV(HY)

Highest at USD 10,527.2 MM

-4What is not working for the Company

ROCE(HY)

Lowest at 76%

INTEREST(Q)

At USD 123.1 MM has Grown at 67.71%

Here's what is working for Automatic Data Processing, Inc.

Dividend per share

Highest at USD 5.87 and Grown

In each year in the last five years

MOJO Watch

Company is distributing higher dividend from profits generated

DPS (USD)

Operating Cash Flow

Highest at USD 4,939.7 MM

in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (USD MM)

Cash and Eqv

Highest at USD 10,527.2 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is improving

Cash and Cash Equivalents

Raw Material Cost

Fallen by -0.68% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales

Here's what is not working for Automatic Data Processing, Inc.

Interest

At USD 123.1 MM has Grown at 67.71%

period on period (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (USD MM)

Non Operating Income

Highest at USD 0.09 MM

in the last five periods

MOJO Watch

Increased income from non business activities may not be sustainable

Non Operating income