4-Star Stocks Poised to Pop: ADP

Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, payroll processing giant 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	$26.9 billion
Industry	Data processing and outsourced services
Trailing-12-Month Revenue	$9.56 billion
Management	President/CEO Gary Butler Vice President/CFO Christopher Reidy
Return on Equity (average, past 3 years)	22.6%
Cash/Debt	$1.6 billion / $37.4 million
Dividend Yield	2.7%
Competitors	Intuit (Nasdaq: INTU  ) Paychex (Nasdaq: PAYX  )

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

On CAPS, 95% of the 1,079 members who have rated ADP believe the stock will outperform the S&P 500 going forward. These bulls include rcameraman and Blackarrow1969.

Just last week , rcameraman summed up the ADP bull case for our community: "While it may take more time than expected, sooner or later employment will move up and so will interest rates. When this happens ADP will be able to increase profits and free cash flow from the double effect of these increases."

Over the past five years, ADP has even grown its unlevered free cash flow at a brisk rate of 22% annually. That's faster than listed competitors such as Intuit (7%) and Paychex (6%), as well as other business services plays such as Accenture (NYSE: ACN  ) (7%).

CAPS member Blackarrow1969 expands on the ADP outperform case:

This looks to be a steady sort of stock that will fit well into most portfolios. The increasing dividends help during downmarket times, and as employment increases in coming years it will help ADP's bottom line. Don't expect any massive sudden pops with this one, but it's a great choice for a long-term investment.

What do you think about ADP, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!