#5 - Automatic Data Processing (NASDAQ:ADP)
For investors that are nearing retirement, consistency is the name of the game. And that’s what investors get from Automatic Data Processing (NASDAQ:ADP). The company is the largest payroll processor in the United States. The company has competition from Paycom (NYSE:PAYC). However, the company still has a strong moat with small- and mid-size businesses. This is because of the flexible packages that ADP provides for its customers.
The company’s 2.15% dividend yield is pedestrian. But as dividend investors know, yield is not the best measure of a company’s dividend. ADP has increased its dividend for 47 years and has a payout ratio of 37.24% which is easily supported by the company’s recurring revenue.
That recurring revenue is also a reason that the company has managed a 100% increase in its stock price over the last five years. And ADP stock is up 57% since the onset of the pandemic. The company should also have a short-term catalyst as the economy begins to reopen and hiring increases.
About Automatic Data Processing
Automatic Data Processing, Inc provides cloud-based human capital management solutions worldwide. It operates in two segments, Employer Services and Professional Employer Organization (PEO). The Employer Services segment offers strategic, cloud-based platforms, and human resources (HR) outsourcing solutions.
Read More - Current Price
- $305.15
- Consensus Rating
- Hold
- Ratings Breakdown
- 2 Buy Ratings, 8 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $289.91 (5.0% Downside)
