#5 - Automatic Data Processing (NASDAQ:ADP)
Sometimes the best reason to sell a stock is that it's simply too expensive. That's the case with Automatic Data Processing, Inc. (NASDAQ: ADP). The company provides cloud-based solutions for human resources.
The company has always been a favorite of value-oriented investors because its business model delivers consistent revenue and earnings that support a dividend that has increased for the last 48 years.
However, in 2020, the company's revenue and earnings grew sharply to support the shift to remote and hybrid work. ADP stock was a beneficiary as it climbed over 75% since the beginning of 2020. This made the company a great choice for growth-oriented investors.
But that growth is leveling off. And ADP stock looks expensive with a P/E ratio of over 30x earnings and a forward P/E ratio of around 27x.
Of the 22 analysts that have issued a rating for ADP in the last three months, 19 have either a Hold or lower.
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
- $294.02
- Consensus Rating
- Hold
- Ratings Breakdown
- 2 Buy Ratings, 8 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $289.91 (1.4% Downside)
