Automatic Data Processing: Patience Is Warranted Given The Lofty Valuation
Automatic Data Processing (ADP) is a leader in the human resources and payroll outsourcing market. Their expertise across the world with operations in 140 countries allows businesses to focus on the things that truly matter to their core business.
ADP's client acquisition has been impressive even before factoring in the chaos that was 2020. At the end of FY 2019 they had 810k+ clients across their various product offerings and by FY 2020 that was up to 860k+ and FY 2021 showed a rise to 910k+.
ADP has performed well for me since I initiated a position in late 2019 and added throughout the worst of the pandemic selloff. With another year passed it and shares hitting all time highs it was time to re-value this great business.
A lengthy dividend growth history is a potential sign of a quality business with a moat to help protect competitors from taking their economic castle. It's not a sure thing; however, I believe it helps to cut the potential investment universe down to a more manageable size.
Image Source: Author; Data Source: Automatic Data Processing Investor Relations
ADP has an impressive 46-year streak of giving out annual raises to shareholders. That gives them the title of Dividend Aristocrat and has them just a few years shy from becoming a newly crowned Dividend King.