Automatic Data Processing (NASDAQ:ADP) Approves Stock Repurchase Program

Automatic Data Processing (NASDAQ:ADP) declared that its board has authorized a share buyback program on Wednesday, January 14th, RTT News reports. The company plans to repurchase $6.00 billion in shares. This repurchase authorization permits the business services provider to repurchase up to 5.8% of its stock through open market purchases. Stock repurchase programs are usually an indication that the company’s board of directors believes its stock is undervalued.

Automatic Data Processing Stock Performance

Shares of NASDAQ ADP traded up $1.43 during midday trading on Wednesday, reaching $258.50. 1,894,168 shares of the company were exchanged, compared to its average volume of 1,940,369. The stock has a fifty day simple moving average of $257.64 and a 200 day simple moving average of $282.05. Automatic Data Processing has a 1 year low of $247.18 and a 1 year high of $329.93. The company has a current ratio of 1.05, a quick ratio of 1.05 and a debt-to-equity ratio of 0.62. The stock has a market cap of $104.55 billion, a P/E ratio of 25.52 and a beta of 0.86.

Automatic Data Processing (NASDAQ:ADP) last announced its quarterly earnings data on Wednesday, October 29th. The business services provider reported $2.49 EPS for the quarter, beating the consensus estimate of $2.44 by $0.05. The firm had revenue of $5.18 billion during the quarter, compared to analysts’ expectations of $5.14 billion. Automatic Data Processing had a net margin of 19.79% and a return on equity of 70.63%. The business’s revenue for the quarter was up 7.1% compared to the same quarter last year. During the same quarter last year, the business earned $2.33 earnings per share. Automatic Data Processing has set its FY 2026 guidance at 10.811-11.011 EPS. On average, research analysts forecast that Automatic Data Processing will post 9.93 earnings per share for the current fiscal year.

Automatic Data Processing Increases Dividend

The company also recently announced a quarterly dividend, which was paid on Thursday, January 1st. Stockholders of record on Friday, December 12th were given a dividend of $1.70 per share. The ex-dividend date of this dividend was Friday, December 12th. This is an increase from Automatic Data Processing’s previous quarterly dividend of $1.54. This represents a $6.80 dividend on an annualized basis and a dividend yield of 2.6%. Automatic Data Processing’s dividend payout ratio is presently 67.13%.

Wall Street Analyst Weigh In

ADP has been the subject of several research reports. Jefferies Financial Group restated an “underperform” rating and set a $230.00 price objective (down from $245.00) on shares of Automatic Data Processing in a research report on Tuesday, December 16th. Weiss Ratings reaffirmed a “hold (c+)” rating on shares of Automatic Data Processing in a research report on Monday, December 29th. UBS Group reduced their target price on shares of Automatic Data Processing from $315.00 to $290.00 and set a “neutral” rating for the company in a report on Wednesday, September 17th. Wells Fargo & Company cut their target price on shares of Automatic Data Processing from $288.00 to $272.00 and set an “underweight” rating for the company in a report on Thursday, October 30th. Finally, Citigroup began coverage on shares of Automatic Data Processing in a report on Thursday, October 23rd. They set a “neutral” rating and a $303.00 price objective on the stock. Two research analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and two have assigned a Sell rating to the company. According to data from MarketBeat, the stock presently has a consensus rating of “Hold” and a consensus target price of $306.42.

Insider Transactions at Automatic Data Processing

In other news, VP Christopher D’ambrosio sold 543 shares of the stock in a transaction that occurred on Tuesday, January 13th. The stock was sold at an average price of $262.29, for a total transaction of $142,423.47. Following the completion of the transaction, the vice president directly owned 9,998 shares in the company, valued at approximately $2,622,375.42. This represents a 5.15% decrease in their position. The transaction was disclosed in a filing with the SEC, which can be accessed through this hyperlink. Also, VP David Kwon sold 806 shares of the company’s stock in a transaction that occurred on Monday, January 12th. The shares were sold at an average price of $264.80, for a total value of $213,428.80. Following the sale, the vice president owned 11,187 shares in the company, valued at $2,962,317.60. The trade was a 6.72% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last ninety days, insiders have sold 2,249 shares of company stock worth $589,852. Corporate insiders own 0.20% of the company’s stock.

Automatic Data Processing Company Profile

Automatic Data Processing, Inc (ADP) is a global provider of cloud-based human capital management (HCM) and payroll solutions. Founded in 1949 and headquartered in Roseland, New Jersey, ADP began as a payroll processing company and has evolved into a diversified provider of workforce management, HR, benefits administration, tax and compliance services, and analytics for employers of all sizes.

ADP’s product portfolio includes payroll processing and tax filing, time and attendance systems, benefits administration, talent management, and HR outsourcing.