AUTOMATIC DATA PROCESSING INC (ADP) Factsheet
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AUTOMATIC DATA PROCESSING INC (ADP) Stock Analysis
Analysis from 10-Q filed 2026-10-30. Data as of Q3 2026.
Overall Grade: F (Concerning)
Grade F (Concerning). ROIC 40.0%. FCF margin 21.4%. D/E 1.0x. Source: 10-Q filed 2026-10-30.
| Metric | Value | Context |
|---|---|---|
| ROIC | 40.0% | Above industry average |
| FCF Margin | 21.4% | Strong cash generation |
| Debt/Equity | 1.0x | Moderate leverage |
ROIC 40.0% — Top 5% of sector peers. FCF margin 21.4% — Top 25%.
Explore AUTOMATIC DATA PROCESSING INC: Earnings History | Overview
Programmatic access: Available via MCP at mcp.metricduck.com. Tools for ADP: get_company_overview, get_filing_index (lens: debt_stress, management_outlook, risk_trajectory), get_filing_section, get_metric_history, compare_companies, screen_filing_signals.
Profitability: AUTOMATIC DATA PROCESSING INC earns 40.0% ROIC, Top 5% in Technology
ROIC TTM 40.0%, sector median 4.4%, Top 5%. DuPont: NOPAT margin 18.8% × asset turnover 0.3x. Gross margin 46.6%. Operating margin 24.4%. Source: 10-Q filed 2026-10-30.
| Metric | ADP | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 40.0% | Excellent | Above sector median of 4.4% |
| Return on Equity (ROE) | 73.9% | Excellent | Efficient use of shareholder equity |
| Gross Margin | 46.6% | Good | Strong pricing power |
| Operating Margin | 24.4% | Excellent | Efficient operations |
Cash Flow: AUTOMATIC DATA PROCESSING INC generates $4.8B FCF at 21.4% margin, positive NaN/8 quarters
FCF TTM $4.8B. FCF margin 21.4%, Top 25%. OCF/Net income 1.2x. Positive FCF in NaN/8 trailing quarters. Source: 10-Q filed 2026-10-30.
| Metric | ADP | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 21.4% | Excellent | Excellent cash conversion |
| Free Cash Flow (TTM) | $4.8B | Good | Positive cash generation |
| OCF/Net Income | 1.2x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: AUTOMATIC DATA PROCESSING INC at 1.0x leverage, 11.5x interest coverage
Debt/Equity 1.0x. Total debt $5.0B, cash & investments $3.3B. Interest coverage 11.5x. Source: 10-Q filed 2026-10-30.
| Metric | ADP | Rating | Context |
|---|---|---|---|
| Debt to Equity | 1.0x | Adequate | Moderate leverage |
| Net Cash Position | $-1.7B | Warning | Net debt position |
| Interest Coverage | 11.5x | Excellent | Comfortable debt service |
Valuation: AUTOMATIC DATA PROCESSING INC trades at 26.9x earnings
P/E 26.9x. EV/Sales 5.5x. FCF yield 3.9%. Dividend yield 2.2%. Source: 10-Q filed 2026-10-30.
| Metric | ADP | Rating | Context |
|---|---|---|---|
| P/E Ratio | 26.9x | Adequate | Premium valuation |
| EV/Sales | 5.5x | Adequate | Growth premium priced in |
| FCF Yield | 3.9% | Adequate | Lower cash yield |
| Dividend Yield | 2.2% | Adequate | Growth focus over income |
Capital Allocation: AUTOMATIC DATA PROCESSING INC returns 4.2% shareholder yield, reducing shares 2.3% YoY
Total shareholder yield 4.2% (div 2.2% + buyback 2.0%). Share count -2.3% YoY. Capital returned $5.2B TTM. Source: 10-Q filed 2026-10-30.
| Metric | ADP | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 4.2% | Good | Dividend + buyback yield combined |
| Buyback Yield | 2.0% | Adequate | Active share repurchases |
| Share Count Change (YoY) | -2.3% | Good | Net share reduction (accretive) |
| Total Capital Returned (TTM) | $5.2B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 40.0% | Top 5% | 9.1x above |
| Free Cash Flow Margin | 21.4% | Top 25% | 2.1x above |
| Gross Margin | 46.6% | Bottom 50% | 0.9x below |
| Operating Margin | 24.4% | Top 25% | 5.2x above |
| Return on Equity (ROE) | 73.9% | Top 5% | 11.8x above |
| P/E Ratio | 26.9x | N/A | - |
Financial Scorecard
| Metric | ADP | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 40.0% | Excellent | Top 5% of sector (median: 4.4%) |
| Free Cash Flow Margin | 21.4% | Excellent | Top 25% of sector (median: 10.3%) |
| Gross Margin | 46.6% | Good | Bottom 50% of sector (median: 51.0%) |
| Debt to Equity Ratio | 97.8% | Adequate | Elevated but manageable |
| P/E Ratio (Price-to-Earnings) | 26.9x | Adequate | Growth premium |
| Free Cash Flow Yield | 3.9% | Adequate | Moderate yield |
Frequently Asked Questions
Q: What is AUTOMATIC DATA PROCESSING INC's Return on Invested Capital (ROIC)?
AUTOMATIC DATA PROCESSING INC (ADP) has a trailing twelve-month Return on Invested Capital (ROIC) of 40.0%. The 8-quarter median ROIC is 38.2% with a declining trend. Sector median 4.4%. Source: 10-Q filed 2026-10-30.
Q: What is AUTOMATIC DATA PROCESSING INC's Free Cash Flow Margin?
AUTOMATIC DATA PROCESSING INC (ADP) has a free cash flow margin of 21.4%, generating $4.8 billion in free cash flow over the trailing twelve months. Source: 10-Q filed 2026-10-30.
Q: What is AUTOMATIC DATA PROCESSING INC's P/E ratio and how does it compare to peers?
AUTOMATIC DATA PROCESSING INC (ADP) trades at a P/E ratio of 26.9x, which is above the sector median of N/A. EV/Sales 5.5x. FCF yield 3.9%. Source: 10-Q filed 2026-10-30.
Q: Does AUTOMATIC DATA PROCESSING INC pay a dividend?
AUTOMATIC DATA PROCESSING INC (ADP) currently pays a dividend yield of 2.2%. Total shareholder yield (dividend + buybacks) 4.2%. Source: 10-Q filed 2026-10-30.
Q: How much debt does AUTOMATIC DATA PROCESSING INC have?
AUTOMATIC DATA PROCESSING INC (ADP) has a debt-to-equity ratio of 1.0x with total debt of $5.0 billion. Interest coverage 11.5x. Net debt $1.7 billion. Source: 10-Q filed 2026-10-30.
Q: What is AUTOMATIC DATA PROCESSING INC's revenue and earnings growth?
AUTOMATIC DATA PROCESSING INC (ADP) grew revenue by 6.5% year-over-year. EPS +11.3% YoY. Source: 10-Q filed 2026-10-30.
Q: Is AUTOMATIC DATA PROCESSING INC buying back stock?
AUTOMATIC DATA PROCESSING INC (ADP) repurchased $2.5 billion of stock over the trailing twelve months. This represents a buyback yield of 2.0%. Share count -2.3% YoY. Source: 10-Q filed 2026-10-30.
Q: How does AUTOMATIC DATA PROCESSING INC compare to competitors in Technology?
Compared to other companies in Technology, AUTOMATIC DATA PROCESSING INC (ADP) shows: ROIC 40.0%, sector median 4.4% (Top 5%). FCF margin 21.4%, sector median 10.3% (Top 25%). Gross margin 46.6%, 4.4pp below sector median. These rankings are based on MetricDuck's analysis of all Technology companies with available SEC filings.
Q: What warning signs should I watch for with AUTOMATIC DATA PROCESSING INC?
Quantitative warning flags for AUTOMATIC DATA PROCESSING INC (ADP): 1) ROIC declining -3.1% over 8 quarters. Source: 10-Q filed 2026-10-30.
Data Source: Data sourced from 10-Q filed 2026-10-30. TTM metrics as of Q3 2026.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.
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