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CORPORATE BACKGROUND General In 1949, our founders established ADP with a simple, innovative idea: help clients focus on their business by solving their payroll challenges. In the more than 75 years since, we have shaped the world of work with innovation and expertise, transforming Human Capital Management ( HCM ) from an administrative challenge to a strategic business advantage.
$255.27
$1.29 (-0.50%)
EOD Jul 17, 2026
Margins and capital returns are both well above average: 24.10% operating margin, ROIC at 31.96%. Consistent with durable pricing power, though that alone doesn't make it a buy.
Revenue grew 7.1%, steady but not accelerating.
ROIC dropped from 46.50% to 31.96%, capital efficiency is deteriorating.
23.8x earnings, 19.4x FCF. Valuation is in a reasonable range. The main question is whether the business can re-accelerate or if current trajectory is already priced in.
Based on TTM earnings · Diluted shares
Profitability & Returns
Revenue (TTM)
$21.60B
▲ +7.1% YoY
Net Income (TTM)
$4.35B
▲ +8.7% YoY
Op. Margin
24.42%
▲ +0.2pp YoY
ROIC
29.90%
▼ -14.5pp YoY
Cash Flow & Balance Sheet
FCF (TTM)
$5.29B
▲ +20.8% YoY
Op. Cash Flow (TTM)
$5.45B
▲ +18.8% YoY
Net Debt
$1.17B
Cash & Equiv.
$3.23B
5Y CAGR: +7.1%
5Y CAGR: +10.8%
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At a P/E of 23.8 and a price-to-free-cash-flow of 19.4, Automatic Data Processing (ADP) trades below a two-stage DCF intrinsic value of about $430.55 per share, so at $255.27 the stock looks undervalued (68.7% below estimated intrinsic value). A high multiple is not the same as overvalued: fast-growing, high-quality businesses can deserve a premium. See the general approach in how to tell if a stock is overvalued.
On quality, Automatic Data Processing scores 90/100 on Intrinsiqq's quality scorecard (a high-quality business on these measures), weighing growth, margins, returns on capital, share count, and balance-sheet strength. It currently yields about 2.5%; see dividend safety for coverage and history. All figures are computed from SEC filings; read the full methodology. This is analysis, not investment advice.
Intrinsiqq's two-stage DCF estimates an intrinsic value of about $430.55 per share for ADP, projecting its recent free cash flow forward with a growth rate that fades toward a long-run rate and discounting it back to today. Applying a 25% margin of safety gives a more conservative fair-value entry around $322.91. At today's $255.27, that puts the stock about 68.7% below estimated intrinsic value. The result is sensitive to the growth and discount-rate inputs, so it is best to run conservative, base and optimistic cases. You can adjust all of them yourself with the sliders on the DCF tab.
Automatic Data Processing scores 90 out of 100 on Intrinsiqq's quality score, a weighted blend of 8 metrics each scored 0 to 100, which makes it a high-quality business on these measures. Recent fundamentals include a 24.4% operating margin and a 29.9% return on invested capital. The score weighs revenue and free-cash-flow growth, operating margins, return on invested capital, share-count change, and balance-sheet strength, all computed from SEC filings, not opinion. Because valuation only means something relative to quality, the full metric-by-metric breakdown is on the quality scorecard.
Yes, Automatic Data Processing pays a regular dividend of about $6.38 per share per year (typically in quarterly installments), a yield of roughly 2.5% at the current price. That is a payout ratio of about 59.1% of earnings, so the dividend is well covered. Automatic Data Processing has grown the dividend at roughly 11.1% a year over the past few years. A low headline yield is not the same as a weak dividend: what matters is how well earnings and free cash flow cover the payout and whether it is growing, not the percentage alone. For ADP's full payout history, growth streak and dividend-safety score, see the dividends tab.
That depends on valuation and quality together, not either alone. ADP currently trades below its estimated intrinsic value and scores 90/100 on quality (high-quality). It also yields about 2.5%. A cheap price is only a bargain if the business is durable, and a premium can be justified by genuine quality, so the two questions, "is it cheap?" and "is it good?", only make sense side by side. Read the valuation against the quality scorecard, run the DCF on your own assumptions, and decide for yourself. This is analysis from SEC filings, not investment advice.