EBIT margin rose 60bps to 21.3% of revenue. The new quarterly dividend rate of $0.93 per share will be distributed on January 1, 2021 to shareholders of record on December 11, 2020. S&P … During the great financial crisis of 2009, ADP slowed its dividend raises to low single digits. ADP is a business outsourcing services company. Then for the first time increased the dividend in 1975. The index is equally weighted, and rebalanced every quarter. Its most recent increase was on November 8 th, 2016, when the company announced a solid 7.5% raise.. ADP is a member of the Dividend Aristocrats, a group of 51 stocks in the S&P 500 Index, with 25+ years of consecutive dividend increases. Find the latest dividend history for Automatic Data Processing, Inc. Common Stock (ADP) at Nasdaq.com. Buying shares of a dividend aristocrat ETF can help you invest in dividend aristocrat stocks more easily and cheaply. This represents a compounded annual growth rate (CAGR) of 13.2% which is truly stunning. ADP is a strong business. Its reshaped business model will place greater emphasis on helping clients streamline their business functions, by investing in cloud-based software as a growth initiative. Since the 2008 financial crisis, the S&P 500 Dividend Aristocrat list has evolved as follows: . Database of Dividend Aristocrats stocks comes from ProShares S&P 500® Dividend Aristocrats. ADP offered up favorable guidance for this year, continuing many years of strong growth. To be included in the Dividend Achievers Index, a stock must be a member of the S&P 500 and meet certain size and liquidity requirements. ADP pays an annual forward dividend of $3.72 per share. ADP has produced strong growth in recent years and we expect that will continue. For example, buying one share … Trades at 29 times forward earnings while the S&P 500 trades at 18.5 times. 2020 - Total number of Aristocrats: 65. ADP maintains a target payout ratio of 55%-60% of annual earnings, so the payout is very safe with room to grow. ADP’s growth is fueled by many competitive advantages. If a recession occurs, ADP should continue to increase its dividend, as customers will still need its services. What’s also interesting is interest earned on clients’ cash held with ADP grew 13% to $134 million. Earnings-per-share came in at $1.34 on an adjusted basis, which represented a 12% gain against the comparable period last year. As we can see above, ADP has built its business in such a way that it can offer a variety of solutions to businesses of any size, making it a true leader in the field. ADP: One of the Fastest-Growing Dividend Aristocrats April 19, 2019 Automatic Data Processing (ADP) was founded in 1949 and is one of the largest providers … Learn more about this quality dividend stock ADP Stock has grown from $5 in January 1990 to $178 as of January 2020. A valuation premium to the S&P 500. There are many other reasons why my filtering start with dividend companies, see my post on why I chose dividend investing. We see fair value for ADP at 22 times earnings, which is a meaningful discount to the current valuation. ADP pays its dividends quarterly. Here is a list of all dividend aristocrats in 2014. In the 70 years since, ADP has grown into the leading payroll and human resource outsourcing company. Consistent dividend growth for 45 years, making this a Dividend Aristocrat. ADP stock is overqualified for that title. This includes the following 7 new additions. Stocks Analysis by Brian Bollinger covering: S&P 500, Automatic Data Processing Inc. Read Brian Bollinger's latest article on Investing.com Rapidly advancing technology makes building a durable competitive advantage in the IT sector difficult. And, the company has continued to increase its dividend annually every year since. In fact, ADP is the only Dividend Aristocrat in the information technology sector. Think of this as free money the company makes while paying its clients’ employees. Information Technology. Free Cash Flow = Cash from Operations – Capital Expenditures, Dividend Payout Ratio = Total Dividends Paid / Free Cash Flow. In its 1st Quarter, 2020 earnings results, ADP reported a 6% growth in revenues coming in at $3.5 billion. These ... McDonald’s Stock is a member of the elite S&P 500 Dividend Aristocrats index. This is a fairly rich valuation by most standards, and it is high by ADP’s own historical norms as well. The poor spend their money and invest what is left.”. ADP processes payroll for 26 million workers in the United States and 15 million internationally, as well is in partnership with over 7,100 tax agencies in the US. ADP which is now branded as “Always Designing for People” was founded in 1949 with one mission in mind; to free businesses from non-core tasks such as processing payroll and human resources management. Within this list is a subset of companies known as Dividend Kings. The S&P 500 Dividend Aristocrats Index, ... the individual stocks in the Aristocrats Index that have outperformed the S&P 500 by wide margins so far in 2018 are ADP and Sysco. Dividend Payout Ratio measures how much of a company’s free cash flow is paid out in the form of dividends. By geography, approximately 86% of ADP’s sales are generated in the U.S., 9% in Europe, 2% in Canada, and 2% in other countries. There should be plenty of growth going forward, both in terms of earnings and dividends. Attached chart shows ADP’s dividend growth history showing a nice steep uptrend and the power of compounding in play. This number of annual dividend increases makes ADP a Dividend Aristocrat. The most recent price for ADP’s stock can be accessed by going to the company’s Investor Relations website and clicking on “Stock Information.”, “The philosophy of the rich and the poor is this: the rich invest their money and spend what is left. Automatic Data Processing (ADP) is a dividend aristocrat that has increased its dividend for 41 straight years. This pattern is the most common among the Dividend Aristocrats. The S&P Dividend Aristocrats index tracks companies in the S&P 500 that have increased dividends every year for at least 25 years in a row. A Dividend Aristocrat is a company in the S&P 500 that has paid and increased its base dividend every year for at least 25 consecutive years. Net income grew 15% coming in at $582 million implying a net profit margin of 16.6%. Rarely do investors find a combination of strong growth prospects and recession resilience, along with a world-class dividend increase streak. ADP has a leading position across its strategic pillars, as well as a highly diversified client list; no single customer represents more than 2% of annual revenue. ADP has raised its dividend each year for 45 years in a row. This article will review ADP’s fundamentals and discuss whether the stock is trading at an attractive enough valuation to buy now. ADP is a member of the Dividend Aristocrats, a group of 57 stocks in the S&P 500 Index, with 25+ years of consecutive dividend increases. This number sits at a healthy 7% clip. Indeed, ADP’s moat keeps competitors at bay, and leads to high levels of profitability. ADP Stock is in red line versus the S&P 500 which is in blue. Dividend articles featuring Adp (ADP): 2020-06-06 Dividend Champion And Contender Highlights: Week Of June 7 2020-06-06 5 Safe And Cheap Dividend Stocks To Invest In (June 2020) 2020-06-01 3 Best Dividend Aristocrats And Kings, And 3 To Avoid 2020-05-29 10 Dividend Growth Stocks For May 2020 2020-04-16 The 13 Best Dividend Aristocrats To Buy In This Uncertain Economy Free cash flow is calculated from the statement of cash flows, and is not artificially modified using accounting rules or non-cash expenses like depreciation, amortization, fair value revaluations, etc. Management has provided outlook for 2020 fiscal year where revenues are expected to grow between 6% to 7% led by PEO Services which is expected to grow 9% to 11%. With a 45-year track record of dividend increases, ADP has qualified for the title nearly twice over. There are 64 Dividend Aristocrats. The company recently reported fiscal 2020 first-quarter earnings, which was another terrific quarter. The annual forward dividend is the most recent quarterly dividend approved by ADP’s board of directors. ADP enjoys tremendous scale that its competitors cannot match. ADP stock trades at 29 times forward estimated earnings of full year 2020 while the broader market as measured by the S&P 500 trades at 18.5 times. The company processed $2.1 trillion of payroll and taxes for its clients in 2019, which is a massive number. PEO is the fastest growing segment growing revenues at a compounded annual growth rate (CAGR) of 14% while ES is at 5%. According to ADP’s 2019 Investor Presentation, Human Capital Management is a $125 billion global market, of which it has only captured $14.2 billion, which works out to 11.4%. They are very popular amongst dividend investors as they have historically outperformed the S&P500 index and are less volatile than average. The reason for ADP’s continued growth during the Great Recession is that businesses still need payroll and human resource services, even in an economic downturn. That's roughly a third of what its peers are priced at, and a 25% discount to CAH's own historical forward P/E. ADP Stock last raised its annual dividend by 15% on November 12th, 2019 to $3.64 per share. ADP Is A Dividend Aristocrat. ADP is a member of the Dividend Aristocrats, a group of 57 stocks in the S&P 500 Index, with 25+ years of consecutive dividend increases. Automatic Data Processing (ADP) might not be a household name, but it should be for dividend growth investors. Total revenue gained 6% to $3.5 billion while adjusted earnings before interest and taxes, or EBIT, increased 8% to $745 million. S&P500 US Dividend Aristocrats Requirements. Regulations continue to increase and become more complex. Dividend Aristocrats. Each stock has increased its annual dividend 25 or more consecutive years. Over the last decade, ADP has grown its revenues from $8.93 billion in 2009 to $14.2 billion in 2019. It has approximately 800,000 clients, in more than 140 countries worldwide. These 57 are large, US companies that have historically provided (slightly) better performance and (slightly) lower volatility than the S&P 500 as a whole. During the great financial crisis of 2008, the stock dropped 35% from peak of $44 to trough of $29. The good news is that the company is growing at a high enough rate that it could help justify something close its current valuation. ADP has grown its dividend each year since 1976 and became a Dividend Aristocrat in 2000. Charts; Tables; NAME SYMBOL PRICE PRICE % MARKET CAP . There are 64 Dividend Aristocrats. This indicates the stock looks reasonably valued today. EBIT margin rose 60bps to 21.3% of revenue. ADP stock is … Based upon the forecast for earnings-per-share management provided, the payout ratio for this year should be right at 60%. Rock-solid dividend aristocrats you can bank on. So they have both a reliable history of paying a dividend (25 years uninterrupted!) The payout for fiscal 2019 is $3.64 per share after the November 2019 increase. Both segments produced gains as Employer Services saw its top line increase 4% and PEO Services’ revenue rose 8%. ADP is a member of the S&P 500 Dividend Aristocrats index since it has raised its dividends for 45 years in a row, without missing a single year. This streak qualifies ADP as a Dividend Aristocrat. Given ADP’s size and scale, we believe it will perform well during the next recession, which increases the attractiveness of the stock. The new quarterly dividend rate of $0.93 per share will be distributed on January 1, 2021 to shareholders of record on December 11, 2020. For 2020, we had seven additions and no deletions. Earnings-per-share came in at $1.34 on an adjuste… McDonald’s Stock is a member of the elite S&P 500 Dividend Aristocrats index. ADP's most recent quarterly dividend payment was made to shareholders of record on Friday, January 1. Free cash flow is the cash a company generates from its daily operating activities minus capital expenditures like investing in new plants or equipment. For 2020, we had seven additions and no deletions. The Dividend Aristocrats Index is a list of 50 stocks that have consecutively increased their dividend payments for at least 25 years. It is a list of companies with stable businesses that have competitive advantages and have returned cash to shareowners consistently through dividends. Revenue grew 6% year over year from 2018’s total of $13.35 billion. Industrials. Measuring the Dividend Payout Ratio of ADP Stock, Stock’s Valuation versus S&P 500 Technology (XLK), Investing in Emerson Stock, a 64 Year Dividend Aristocrat, General Dynamics Stock, a 28 Year Dividend Aristocrat, Kimberly Clark Stock, a 47 Year Dividend Aristocrat, McDonald’s Stock, a 40 Year Dividend Aristocrat, Best Dividend Stocks in S&P 500 Industrials (XLI) – Download Excel Spreadsheet. It was founded in 1949, and began with a single client. Sizable 11% annual dividend growth rate over last 5 years. Automatic Data has raised its dividend 44 consecutive years, making it a dividend aristocrat and putting it on track to become a dividend king in 2025. The Canadian Dividend Aristocrat list serves as a screen for further investigating a stock for a dividend growth portfolio. ADP has one of the longest streaks of dividend increases in the stock market. Hikes have averaged a modest 5.2% over the … On the right side of the screenshot shows performance of ADP Stock versus the S&P 500. 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