4-Star Stocks Poised to Pop: ADP

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Based on the aggregated intelligence of 135,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, payroll processor Automatic Data Processing (Nasdaq: ADP) has earned a respected four-star ranking.

With that in mind, let's take a closer look at ADP's business and see what CAPS investors are saying about the stock right now.

ADP facts

Headquarters (founded)	Roseland, N.J. (1949)
Market Cap	$18.76 billion
Industry	Data Processing and Outsourced Services
Trailing-12-Month Revenue	$8.97 billion
Management	CEO Gary Butler CFO Christopher Reidy
Return on Equity (average, last three years)	19.5%
Dividend Yield	3.5%
Competitors	Paychex (Nasdaq: PAYX) Administaff (NYSE: ASF)
CAPS Members Bullish on ADP Also Bullish on	Johnson & Johnson (NYSE: JNJ) Procter & Gamble (NYSE: PG)
CAPS members bearish on ADP Also Bearish on	General Electric (NYSE: GE) Pfizer (NYSE: PFE)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS.

Over on CAPS, fully 196 of the 203 All-Star members who have rated ADP -- some 96.5% -- believe the stock will outperform the S&P 500 going forward. These bulls include TMFBuck and dudemonkey.

In late February, TMFBuck reminded Fools that ADP "is an excellent business that generates a substantial amount of float." My Foolish colleague concludes: "In the event inflation rears its ugly head and interest rates rise, they will earn even more."

In a pitch from April, dudemonkey offers first-hand insight into ADP's advantages:

I'm the technical owner of our ADP applications at my company. Their offerings are comparable to their competitors, their support is reasonable, and their systems are sound although inscrutable at times. However, ADP has a strong economic moat due to the difficulty encounter when attempting to switch away from their applications. … ADP is known as the industry leader in business systems and has no serious competition to that title. It has competitors, for sure, but none of them have the reputation that ADP has. ADP is also a dividend aristocrat.

What do you think about ADP, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 135,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.