Automatic Data Processing (Nasdaq:ADP)

Automatic Data Processing (Nasdaq:ADP) is one of the largest providers of payroll and human resources services to businesses. They tailor their services based on the size of the client, although they have made their mark primarily on multinationals and large enterprises. ADP has 550,000 clients to whom it can provide the benefit of its 60 years of experience..

HR support services provided by ADP are among the sectors that are resisting the crisis, as it is true that employees will always have to be paid if they are to provide a service. In addition, the cumbersome procedures and systems that must be put in place mean that you cannot change suppliers overnight. SAP provided us with a good example of this.

ADP currently offers a dividend of 3.3%, which is significantly higher than its long-term average of 2.94%. The company has managed to increase it by 15.19% per year over the medium term, which is already very good, but it has also been growing it for 34 years, making it a dividend aristocrat. I'll let you imagine the dividend yield you would have gotten today if you had bought the stock back then. ...

Despite the strong dividend growth, the payout ratio is 57.4%, which is correct and leaves ADP with some margin in case of a difficult passage.

Let's finish with volatility, which, paradoxically for a Nasdaq stock, is one of the company's main strengths, with 8.7%, even less than Procter & Gamble. When I told you that the sector was defensive in style...

From these indicators, our algorithm is of course still in hold position. Even though ADP has underperformed like many of our stocks in recent months, we still keep the long term in mind...