Opinions
Alan Kral , CFA, CIC
Automatic Data Processing
ADP-Q
TOP PICK
Jun 12, 2008
Stock price when the opinion was issued
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A payroll and HR company. A fairly pricey stock. Trades at about a 40% premium to the market. 70% of their business comes from payroll services and 30% from Human Resources operations. Over the last 6-7 years, the US has produced 15 million private sector jobs, which is great for a company like this. This is now a little too rich, and a little too late to the cycle.
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.
ADP — 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.