Payroll is not a flashy business. But it is a mission-critical one (not to mention a nice contrast to the many hyped-up artificial intelligence-names that have become market darlings in 2025). And that is why Automatic Data Processing (ADP +1.03%) has been able to quietly compound for decades while paying shareholders more every year, turning it into a Dividend King that every investor looking to bolster their portfolio with a growing stream of income should consider.
ADP sits in the middle of a recurring, compliance-heavy workflow that companies cannot afford to get wrong, making switching costs high. In other words, when it comes to payroll, employers tend to prefer a trusted platform once it is in place. And as a leader in payroll, ADP is a go-to solution for many companies. That creates the kind of durability that supports a long dividend streak.
Here's a closer look at ADP's growth story, including its impressive dividend track record.
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A Dividend King in tech
In mid-November, ADP's board approved a dividend increase that marked the company's 51st consecutive year of dividend increases. The company lifted its quarterly dividend by $0.16 per share to $1.70, translating to about a 10% increase.
A track record of 51 consecutive increases puts ADP in the rare company of Dividend Kings, defined as companies that have raised their dividends for at least 50 consecutive years. Highlighting the unique durability of its business, ADP is the only technology company that has made it into the coveted list.
The reason ADP can do this comes down to what it sells. Payroll and human capital management (HCM), which are ADP's core offerings, touch every employee, every pay period. Sure, a recession can slow hiring, and a weak labor market can pressure volumes. But the work itself still has to happen, and thus payroll is always necessary.
That resilience showed up again (like clockwork) in ADP's first quarter of fiscal 2026. Revenue rose 7% year over year to $5.2 billion, and adjusted earnings per share increased 7% to $2.49. Interest on funds held for clients rose 13% to $287 million.
Why growth can accelerate
For most investors, the default way to think about ADP is as a steady payroll processor. That framing is not wrong, but it is incomplete. There are several levers ADP is pulling to accelerate its sales growth. Specifically, the company is trying to expand within its customer base -- and to win new customers through channels that did not exist a decade ago.
One example is embedded payroll. Rather than forcing a small business to leave its day-to-day software to run payroll on ADP's native platform, ADP is increasingly integrating payroll into platforms those businesses already use. That is less friction for the customer and a broader distribution network for ADP.
The mid-market and enterprise opportunity is different, but the logic is similar. ADP wants its modern platforms to become the system employers build around, not just the vendor that runs a payroll file. Management, for instance, highlighted momentum for ADP Lyric HCM in the quarter.
"Lyric's new business bookings exceeded our expectations for the first quarter and its new business pipeline continues to grow," said ADP CEO Maria Black in the company's most recent earnings call.
Sure, ADP's growth may not seem explosive when viewed over a short period. But when you have consistent earnings-per-share growth in the mid-to-high single-digits (and maybe even double digits with the help of these levers), ADP can deliver significant shareholder value over the long term.
NASDAQ: ADP
Key Data Points
In addition, with a payout ratio of about 59%, there's plenty of room for ADP's dividend to grow -- especially when you pair this low payout ratio with its earnings momentum and with management's progress on new growth levers. Enhancing the bull case further, investors who buy the stock now get access to a solid dividend yield of 2.6%.
Of course, even a 51-year track record of dividend increases doesn't make ADP a risk-free stock. Payroll volumes can soften if employment slows materially. Further, the company's interest income can cool if interest rates fall.
Still, the long-term appeal is clear: ADP has a business model built on trust and repetition, and it is using that foundation to push deeper into higher-value software. For investors who like dividend growth but also want a company that can keep evolving and potentially even accelerate its earnings growth rate from fiscal Q1 levels (indeed, management guided for full-year fiscal 2026 earnings-per-share growth of 8% to 10% year over year for the full year of fiscal 2026), ADP is an excellent bet -- and one that could provide big returns to investors over the next 10 years.
