Automatic Data Processing (ADP) DIvidends Date & History

Key Takeaways

• Automatic Data Processing (ADP) provides a forward dividend yield of 3.17%, exceeding its five-year average of 2.02%.
• The company distributes a quarterly dividend of $1.70 per share, annualizing to $6.80.
• ADP has raised its dividend for 51 consecutive years, securing Dividend King status.
• Payout ratio of 60.45% supports ongoing sustainability.
• Levered free cash flow (FCF, cash generated after capital expenditures) of $4.85 billion (trailing twelve months, or TTM) amply covers dividend obligations.
• Next ex-dividend date is June 12, 2026; payment follows on July 1, 2026.

Dividend Overview

Automatic Data Processing (ADP), a global leader in human capital management solutions, upholds a shareholder-friendly dividend policy characterized by reliability and growth. The forward annual dividend stands at $6.80 per share, delivering a yield of 3.17%. Paid quarterly at $1.70 per share, this payout reflects ADP's commitment to returning capital consistently. With a history of annual increases spanning over five decades, ADP qualifies as a premier dividend growth stock rather than a high-yield play. Its yield comfortably surpasses historical averages, appealing to investors prioritizing steady income growth over maximum current yield. This profile underscores ADP's financial discipline in the competitive business services sector.

Dividend History and Growth

ADP's dividend journey exemplifies consistency. The company has increased its payout for 51 consecutive years, recently marking the 51st hike with a move to an annual rate of $6.80 per share. Notable was a 10% quarterly increase in early 2026, celebrating the 50th year of growth. Over the past five years, dividends have grown at a compound annual rate exceeding 11%, supported by recurring revenue from payroll and HR services. No cuts have occurred in decades, reflecting a long-term strategy of prudent capital allocation amid business expansion.

Dividend Sustainability and Payout Ratio

ADP's dividend sustainability shines through key metrics. The payout ratio of 60.45%—the portion of earnings paid as dividends—leaves ample room for reinvestment and future hikes. Earnings per share (EPS) of $10.71 (TTM) provide solid coverage. FCF of $4.85 billion (TTM, levered) versus estimated annual dividends around $2.7 billion yields an FCF payout ratio near 56%, ensuring cash flow adequacy. Low debt levels and a trailing price-to-earnings (P/E) ratio of 19.98 further bolster stability, positioning the dividend as secure even in economic downturns.

Dividend Compared to Industry Peers

In the business services sector, ADP's 3.17% forward yield exceeds the industry average of approximately 2.4%. Peer PAYX (Paychex) offers a higher 4.64% yield but with a concerning 95.36% payout ratio, raising sustainability questions. ADP's lower payout and superior growth streak provide a more balanced profile compared to staffing firms like RHI (Robert Half), which trails in yield and consistency. This makes ADP a standout for quality-focused income seekers.

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Is This Stock Attractive for Dividend Investors?

Automatic Data Processing (ADP) suits dividend growth investors valuing longevity and reliability over sky-high yields. Its 51-year streak appeals to those building portfolios for compounding income, as consistent raises have outpaced inflation historically. Conservative investors may appreciate the moderate 3.17% yield backed by strong FCF coverage and a manageable payout ratio, offering defense in volatile markets. Long-term holders benefit from ADP's sticky recurring revenues in HR and payroll, supporting future hikes. However, yield chasers might look elsewhere, as PAYX provides more immediate income albeit with higher risk. Overall, ADP fits balanced strategies prioritizing quality and growth potential without excessive volatility.

Disclaimer

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