Opinions
Martin Cobb, ASIP
Automatic Data Processing
ADP-Q
TOP PICK
Sep 11, 2025
Stock price when the opinion was issued
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non-FANG suggestion? He likes the payment processing space -- ADP, Paychex, Visa, or Mastercard. He would like to buy on a dip.
(A Top Pick Jan 13/20, Down 5%) A play in payroll in the US. The company has increased dividends for 45 consecutive years. Effectively the same as Visa in terms of payment processing. Buy when it's on sale. A great company and a core holding. Would add on weakness.
Premium contentPremium contentADP — providing solutions that simplify work. Since our very beginnings, we’ve been at the forefront of payroll and HR innovation. Today, as always, we're proud to design better ways to work, with people at the heart of everything we do. Social media mentions are up 450% in the past 24h.
Likes it. Largest payroll provider in NA. Outperformed PAYX over the last 1-, 5-, and 10-year periods. Extremely good growth, incredibly efficient. Huge market share. Expanding offerings by expanding services into related areas, but it's all automated so labour costs avoided. Still room to grow.
Huge FCF, buying back shares, raising dividend.
Admittedly, there are threats from AI to software, but this is a trusted outsourcer. Processes roughly 1 in 6 paycheques for NA workers. Handles $2.5T of clients' money every year. Large market share. Double-digit EPS growth. Not a down year in revenues this century, even during the global financial crisis.
(Analysts’ price target is $322.71)Over 1M clients in 140 countries, but NA is 80+% of the business and it really is a US company. High 20s PE multiple. Yield is 2.09%.