AUTOMATIC DATA PROCESSING INC (ADP) Factsheet
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AUTOMATIC DATA PROCESSING INC (ADP) Stock Analysis
Analysis from 10-Q filed 2025-10-31. Data as of Q2 2026.
Overall Grade: F (Concerning)
Grade F (Concerning). ROIC 39.4%. FCF margin 22.7%. D/E 0.8x. Source: 10-Q filed 2025-10-31.
| Metric | Value | Context |
|---|---|---|
| ROIC | 39.4% | Above industry average |
| FCF Margin | 22.7% | Strong cash generation |
| Debt/Equity | 0.8x | Moderate leverage |
ROIC 39.4% — Top 5% of sector peers. FCF margin 22.7% — Top 25%.
Explore AUTOMATIC DATA PROCESSING INC: Earnings History | Filings
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_changes, get_metric_history, compare_companies, screen_filing_signals.
Profitability: AUTOMATIC DATA PROCESSING INC earns 39.4% ROIC, Top 5% in Technology
ROIC TTM 39.4%, sector median 3.9%, Top 5%. DuPont: NOPAT margin 18.7% × asset turnover 0.3x. Gross margin 46.4%. Operating margin 24.2%. Source: 10-Q filed 2025-10-31.
| Metric | ADP | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 39.4% | Excellent | Above sector median of 3.9% |
| Return on Equity (ROE) | 70.0% | Excellent | Efficient use of shareholder equity |
| Gross Margin | 46.4% | Good | Strong pricing power |
| Operating Margin | 24.2% | Excellent | Efficient operations |
Cash Flow: AUTOMATIC DATA PROCESSING INC generates $5.0B FCF at 22.7% margin, positive NaN/8 quarters
FCF TTM $5.0B. FCF margin 22.7%, Top 25%. OCF/Net income 1.2x. Positive FCF in NaN/8 trailing quarters. Source: 10-Q filed 2025-10-31.
| Metric | ADP | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 22.7% | Excellent | Excellent cash conversion |
| Free Cash Flow (TTM) | $5.0B | 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 0.8x leverage
Debt/Equity 0.8x. Total debt $5.0B, cash & investments $4.2B. Source: 10-Q filed 2025-10-31.
| Metric | ADP | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.8x | Adequate | Moderate leverage |
| Net Cash Position | $-735.0M | Adequate | Net debt position |
Valuation: AUTOMATIC DATA PROCESSING INC trades at 20.4x earnings
P/E 20.4x. EV/Sales 4.6x. FCF yield 5.5%. Dividend yield 2.9%. Source: 10-Q filed 2025-10-31.
| Metric | ADP | Rating | Context |
|---|---|---|---|
| P/E Ratio | 20.4x | Adequate | Premium valuation |
| EV/Sales | 4.6x | Good | Growth premium priced in |
| FCF Yield | 5.5% | Good | Attractive cash return |
| Dividend Yield | 2.9% | Adequate | Growth focus over income |
Capital Allocation: AUTOMATIC DATA PROCESSING INC returns 5.2% shareholder yield
Total shareholder yield 5.2% (div 2.9% + buyback 2.3%). Capital returned $4.7B TTM. Source: 10-Q filed 2025-10-31.
| Metric | ADP | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 5.2% | Good | Dividend + buyback yield combined |
| Buyback Yield | 2.3% | Adequate | Active share repurchases |
| Total Capital Returned (TTM) | $4.7B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 39.4% | Top 5% | 10.1x above |
| Free Cash Flow Margin | 22.7% | Top 25% | 2.7x above |
| Gross Margin | 46.4% | Bottom 50% | 0.9x below |
| Operating Margin | 24.2% | Top 25% | 5.3x above |
| Return on Equity (ROE) | 70.0% | Top 5% | 13.6x above |
| P/E Ratio | 20.4x | N/A | - |
Financial Scorecard
| Metric | ADP | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 39.4% | Excellent | Top 5% of sector (median: 3.9%) |
| Free Cash Flow Margin | 22.7% | Excellent | Top 25% of sector (median: 8.4%) |
| Gross Margin | 46.4% | Good | Bottom 50% of sector (median: 50.7%) |
| Debt to Equity Ratio | 82.3% | Adequate | Elevated but manageable |
| P/E Ratio (Price-to-Earnings) | 20.4x | Adequate | Fair value |
| Free Cash Flow Yield | 5.5% | Good | Solid cash 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 39.4%. Sector median 3.9%. Source: 10-Q filed 2025-10-31.
Q: What is AUTOMATIC DATA PROCESSING INC's Free Cash Flow Margin?
AUTOMATIC DATA PROCESSING INC (ADP) has a free cash flow margin of 22.7%, generating $5.0 billion in free cash flow over the trailing twelve months. Source: 10-Q filed 2025-10-31.
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 20.4x, which is above the sector median of N/A. EV/Sales 4.6x. FCF yield 5.5%. Source: 10-Q filed 2025-10-31.
Q: Does AUTOMATIC DATA PROCESSING INC pay a dividend?
AUTOMATIC DATA PROCESSING INC (ADP) currently pays a dividend yield of 2.9%. Total shareholder yield (dividend + buybacks) 5.2%. Source: 10-Q filed 2025-10-31.
Q: How much debt does AUTOMATIC DATA PROCESSING INC have?
AUTOMATIC DATA PROCESSING INC (ADP) has a debt-to-equity ratio of 0.8x with total debt of $5.0 billion. Net debt $735.0 million. Source: 10-Q filed 2025-10-31.
Q: What is AUTOMATIC DATA PROCESSING INC's revenue and earnings growth?
AUTOMATIC DATA PROCESSING INC (ADP) grew revenue by 6.7% year-over-year. EPS +9.6% YoY. Source: 10-Q filed 2025-10-31.
Q: Is AUTOMATIC DATA PROCESSING INC buying back stock?
AUTOMATIC DATA PROCESSING INC (ADP) repurchased $2.1 billion of stock over the trailing twelve months. This represents a buyback yield of 2.3%. Source: 10-Q filed 2025-10-31.
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 39.4%, sector median 3.9% (Top 5%). FCF margin 22.7%, sector median 8.4% (Top 25%). Gross margin 46.4%, 4.3pp 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 2025-10-31.
Data Source: Data sourced from 10-Q filed 2025-10-31. TTM metrics as of Q2 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.