Automatic Data Processing (
) has offered steady capital gains and dividend increases in
recent years, rewarding long-term investors who hung on through
the 2008-09 recession.
The world's biggest provider of payroll and data processing
services is up 20% this year, topping the S&P 500. It's risen
23% over the past year and has more than doubled from a low of
30.83 in October 2008.
Meanwhile, the Roseland, N.J.-based company has boosted its
quarterly dividend every year since 2003, a nearly fourfold
increase from 12 cents a share to 44 cents a share. That equates
to an annual dividend of $1.76 a share, which yields 2.5%
annually at the current share price. That's about the same as the
S&P 500 average.
ADP's profit and sales growth has been slow but steady. The
company's three-year earnings stability factory is 1 on a scale
of 0 to 99, with 0 being most stable.
Profit for the fiscal year is seen rising 7% to $2.91 a share,
in line with ADP's three-year average. Earnings are expected to
rise 9% in 2014. Sales growth has averaged 9% over the past three
ADP's fortunes are hitched to the U.S. economy, where it earns
about 80% of its revenue. Europe and Canada account for most of
ADP has been riding its 10-week line higher this year. It
reached a record high of 72 on May 17 before pulling back to its
key support line in quiet volume. It's now 5% off its high and is
showing the elements of a flat base.
Institutional investors are also supporting the stock, whose
Accumulation-Distribution Rating of B is greater than the neutral
Meanwhile, its Composite Rating is a respectable 85 and its
Relative Price Strength Rating is 72.