Automatic Data Processing (NASDAQ:ADP) Reaches New 52-Week High - Time to Buy?

Key Points

• ADP reached a new 52-week high, trading as high as $294.27, although its analyst consensus rating remains “Hold” with an average price target of $273.50.
• The company exceeded quarterly expectations, reporting $2.64 in earnings per share and $5.47 billion in revenue, while revenue increased 6.8% year over year.
• ADP maintains a quarterly dividend of $1.70 per share, equivalent to a 2.3% yield, but insiders sold roughly $9.45 million of stock during the last quarter.

Automatic Data Processing, Inc. (NASDAQ:ADP - Get Free Report) hit a new 52-week high on Wednesday. The stock traded as high as $294.27 and last traded at $292.75, with a volume of 2,503,096 shares traded. The stock had previously closed at $287.03.

Wall Street Analyst Weigh In

Several analysts have recently weighed in on ADP shares. Citigroup boosted their price objective on shares of Automatic Data Processing from $230.00 to $287.00 and gave the stock a "neutral" rating in a research report on Thursday, July 30th. BMO Capital Markets lifted their price target on Automatic Data Processing from $248.00 to $305.00 and gave the stock a "market perform" rating in a research report on Wednesday, July 29th. Guggenheim raised their target price on shares of Automatic Data Processing from $270.00 to $300.00 and gave the stock a "buy" rating in a research report on Thursday, July 30th. UBS Group increased their price target on shares of Automatic Data Processing from $260.00 to $270.00 and gave the stock a "neutral" rating in a research note on Wednesday, July 22nd. Finally, Weiss Ratings raised Automatic Data Processing from a "hold (c)" rating to a "hold (c+)" rating in a research note on Tuesday, September 22nd. Three research analysts have rated the stock with a Buy rating, eight have given a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat.com, the stock has an average rating of "Hold" and a consensus price target of $273.50.

Automatic Data Processing Stock Up 2.0%

The firm has a market cap of $116.00 billion, a price-to-earnings ratio of 26.76, a P/E/G ratio of 2.60 and a beta of 0.83. The company has a current ratio of 1.05, a quick ratio of 1.05 and a debt-to-equity ratio of 0.82. The firm has a 50 day moving average price of $273.69 and a 200-day moving average price of $243.70.

Automatic Data Processing (NASDAQ:ADP - Get Free Report) last issued its quarterly earnings data on Wednesday, July 29th. The business services provider reported $2.64 earnings per share for the quarter, topping analysts' consensus estimates of $2.59 by $0.05. The business had revenue of $5.47 billion during the quarter, compared to analysts' expectations of $5.44 billion. Automatic Data Processing had a net margin of 20.11% and a return on equity of 71.34%. The company's revenue was up 6.8% on a year-over-year basis. During the same period last year, the company posted $2.26 EPS. Automatic Data Processing has set its FY 2027 guidance at 12.120-12.340 EPS. On average, equities analysts forecast that Automatic Data Processing, Inc. will post 12.27 EPS for the current year.

Automatic Data Processing Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Thursday, October 1st. Investors of record on Friday, September 11th were given a dividend of $1.70 per share. The ex-dividend date was Friday, September 11th. This represents a $6.80 dividend on an annualized basis and a yield of 2.3%. Automatic Data Processing's dividend payout ratio (DPR) is 62.16%.

Insiders Place Their Bets

In related news, CEO Maria Black sold 29,810 shares of the company's stock in a transaction on Wednesday, September 2nd. The stock was sold at an average price of $280.91, for a total value of $8,373,927.10. Following the completion of the transaction, the chief executive officer directly owned 80,624 shares in the company, valued at approximately $22,648,087.84. This represents a 26.99% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, VP Joseph Desilva sold 631 shares of Automatic Data Processing stock in a transaction dated Thursday, September 3rd. The shares were sold at an average price of $282.87, for a total value of $178,490.97. Following the completion of the sale, the vice president owned 18,824 shares of the company's stock, valued at $5,324,744.88. This trade represents a 3.24% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last quarter, insiders sold 33,773 shares of company stock worth $9,450,629. 0.15% of the stock is owned by company insiders.

Institutional Trading of Automatic Data Processing

A number of hedge funds have recently made changes to their positions in ADP. Thrive Wealth Management LLC lifted its stake in Automatic Data Processing by 3.5% during the second quarter. Thrive Wealth Management LLC now owns 1,085 shares of the business services provider's stock worth $243,000 after purchasing an additional 37 shares during the period. Tanager Wealth Management LLP boosted its stake in shares of Automatic Data Processing by 4.1% in the 3rd quarter. Tanager Wealth Management LLP now owns 971 shares of the business services provider's stock valued at $251,000 after purchasing an additional 38 shares in the last quarter. Aull & Monroe Investment Management Corp grew its holdings in shares of Automatic Data Processing by 0.3% in the 3rd quarter. Aull & Monroe Investment Management Corp now owns 15,668 shares of the business services provider's stock worth $4,043,000 after purchasing an additional 44 shares during the last quarter. Guardian Partners Inc. boosted its position in Automatic Data Processing by 0.9% in the first quarter. Guardian Partners Inc. now owns 5,127 shares of the business services provider's stock valued at $1,044,000 after buying an additional 47 shares in the last quarter. Finally, Bank & Trust Co raised its stake in shares of Automatic Data Processing by 1.3% in the second quarter. Bank & Trust Co now owns 3,908 shares of the business services provider's stock valued at $875,000 after acquiring an additional 50 shares during the last quarter. Hedge funds and other institutional investors own 80.03% of the company's stock.

Automatic Data Processing Company Profile

Automatic Data Processing, Inc NASDAQ: ADP is a global provider of human capital management and business outsourcing solutions. The company helps employers manage payroll, human resources, workforce administration, benefits, tax compliance, time and attendance, talent management, and related employment processes.

ADP offers cloud-based platforms and services designed for businesses of various sizes, from small enterprises to large organizations. Its portfolio includes payroll processing, human resources management, employee benefits administration, retirement services, workforce management, data analytics, and professional employer organization services through ADP TotalSource.

Founded in 1949, ADP serves businesses in the United States and international markets.

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