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
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.
|Headquarters (Founded)||Roseland, N.J. (1949)|
|Market Cap||$24.2 billion|
|Industry||Data processing and outsourced services|
|Trailing-12-Month Revenue||$9.1 billion|
CEO Gary Butler
CFO Christopher Reidy
|Return on Equity (Average, Past 3 Years)||23.6%|
|Cash/Debt||$1.2 billion / $35.6 million|
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 94.5% of the 1,032 members who have rated ADP believe the stock will outperform the S&P 500 going forward. These bulls include All-Star TMFDeej, who is ranked in the top 1% of our community, and TMFMMTInvestor.
Earlier this month, TMFDeej tapped ADP as an attractive income opportunity: "A solid company that pays a solid dividend for you to wait until either the jobs picture begins to improve or interest rates begin to rise ... both of which will cause ADP's earnings to improve significantly."
ADP's massive scale, high customer switching costs, and cheapish valuation continue to support its four-star CAPS status. Currently, ADP even trades at a forward P/E (18.3) discount to Administaff (23.1) and another Foolish favorite, Paychex (21.6).
CAPS member TMFMMTInvestor elaborates on the bull case:
Well run company. Inflation hedge: growing dividend that's easily covered by earnings and [free cash flow] and they earn a substantial amount of income on their float. They're diversifying their business and have a lot of room to penetrate into overseas markets. Risk of under-performance in the short run due to low interest rates and sustained high unemployment.
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!
Fool contributor Brian Pacampara owns no position in any of the companies mentioned. ADP is a Motley Fool Income Investor pick. Paychex is a choice of Inside Value, and Motley Fool Options has recommended a write covered straddle position it. Try any of our Foolish newsletter services free for 30 days.
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