Automatic data processing (ADP) hits new high of 52 weeks: here’s why


Actions of Automatic Data Processing, Inc. ADP hit a 52-week high at $ 241.18 during the November 22 trading session, before closing a little lower at $ 236.82.

The company’s shares have charted a solid course, appreciating 34.4% year-to-date, against 29.6% growth in the industry to which it belongs and an increase of 26.4% Zacks S&P 500 composite.

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Let’s see what is supporting the rise.

Dividend hike

The Board of Directors of Automatic Data Processing announced an 11.8% dividend increase, bringing its quarterly cash dividend from 91 cents per share to $ 1.04. This reflects the 47e consecutive year of increase in cash dividend. The increased dividend will be paid on January 1, 2022 to shareholders of record on December 10, 2021.

Outlook for 2022

ADP has raised its outlook for fiscal 2022. The company now expects revenue to grow 7-8% from the previous growth rate of 6-7%. Adjusted EPS is now expected to grow 11-13% from the previous growth rate of 9-11%.

The company now expects revenue from employer services to grow at a rate of 5-6% from the previous growth rate of 4-6% and revenue from PEO services at a rate of 11-13%. compared to the previous growth rate of 9%. at 11%.

Consecutive earnings and income

ADP reported better than expected earnings and revenue over the past three quarters.

Acquisitions are auspicious

Strategic acquisitions such as Celergo, WorkMarket, Global Cash Card and The Marcus Buckingham Company have strengthened ADP’s customer base and are helping it expand its operations into international markets. The company continues to seek acquisitions that strategically match its overall business mix and are easy to integrate over the long term.

Three-tier business strategy

ADP’s three-tier business strategy helps it maintain and develop its strong position as a provider of human capital management (“HCM”) technologies and services. The company is focused on providing a complete suite of cloud-based HCM and Human Resources Outsourcing (“HRO”) solutions. It expands its international HCM and HRO business with local software solutions established in the country and multi-country cloud-based solutions.

Rank of Zacks and actions to consider

ADP currently holds a Zacks Rank # 2 (Buy). You can see The full list of Zacks # 1 Rank (Strong Buy) stocks today here.

Some similarly ranked stocks in Zacks’ broader business services sector are Budget Notice AUTO, Gartner That and Charles River CRAI.

Avis Budget has an expected profit growth rate of approximately 398.1% for the current year. The company has a surprise earnings for the last four quarters of 76.7% on average.

Avis Budget shares have jumped 667.5% so far this year. The company shows long-term profit growth of 27.5%.

Gartner forecasts a profit growth rate of approximately 78.3% for the current year. The company has a surprise earnings of 59% on average over the past four quarters.

Gartner shares have jumped 108.8% so far this year. The company has long term earnings growth of 12%.

Charles River has an expected earnings growth rate of approximately 61.2% for the current fiscal year. The company has a surprise earnings of 50.9% on average over the past four quarters.

Charles River shares have jumped 104.9% so far this year. The company shows long-term profit growth of 7.5%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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