Giverny Capital Inc. Buys 235,466 Shares of Automatic Data Processing, Inc. $ADP

Giverny Capital Inc. grew its stake in Automatic Data Processing, Inc. (NASDAQ:ADP – Free Report) by 56.2% in the second quarter, according to its most recent disclosure with the Securities and Exchange Commission (SEC). The institutional investor owned 654,556 shares of the business services provider’s stock after purchasing an additional 235,466 shares during the period. Automatic Data Processing makes up about 5.0% of Giverny Capital Inc.’s holdings, making the stock its 5th largest holding. Giverny Capital Inc.’s holdings in Automatic Data Processing were worth $146,588,000 as of its most recent filing with the Securities and Exchange Commission (SEC).

Several other hedge funds and other institutional investors have also recently made changes to their positions in the stock. Imprint Wealth LLC purchased a new stake in Automatic Data Processing in the 3rd quarter valued at $25,000. Cornerstone Financial Management LLC acquired a new stake in shares of Automatic Data Processing in the 4th quarter worth $26,000. Bard Associates Inc. purchased a new position in shares of Automatic Data Processing during the 4th quarter worth $28,000. Prosperity Bancshares Inc purchased a new position in shares of Automatic Data Processing during the 4th quarter worth $33,000. Finally, Wilkerson Advisory Group LLC acquired a new position in shares of Automatic Data Processing during the 4th quarter valued at about $36,000. Institutional investors and hedge funds own 80.03% of the company’s stock.

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Trending Headlines about Automatic Data Processing

Here are the key news stories impacting Automatic Data Processing this week:

• Positive Sentiment: ADP declared a quarterly dividend of $1.70 per share, equivalent to $6.80 annually and a yield of approximately 2.4%. The payment reinforces the company’s appeal to income-focused investors and its long record of annual dividend increases. Dividend announcement article
• Neutral Sentiment: ADP’s August employment report showed private-sector payrolls increased by 38,000, while base pay rose 3.2% and gross pay grew 4.7%. The data highlights ADP’s influence as a labor-market information provider, but also points to a moderating hiring environment. ADP August employment report
• Neutral Sentiment: One valuation analysis described ADP as roughly 1% undervalued based on recent labor-market data, while noting that the stock has underperformed the broader technology sector. The limited valuation discount suggests investors may need stronger earnings growth to drive further upside. ADP valuation analysis
• Negative Sentiment: A Seeking Alpha analysis downgraded ADP, arguing that recent operating and market tailwinds are already reflected in the share price. The view adds valuation pressure as ADP trades at a relatively elevated earnings multiple. ADP downgrade analysis
• Negative Sentiment: CEO Maria Black sold 29,810 shares worth about $8.4 million, reducing her direct ownership by roughly 27%. Vice President Joseph Desilva separately sold 631 shares for approximately $178,000. Both transactions were executed under pre-arranged Rule 10b5-1 plans, making them less significant as discretionary bearish signals, though the sales may still weigh on sentiment. ADP insider sales
• Negative Sentiment: August private payroll growth of 38,000 missed the 47,000 forecast and slowed from 44,000 in July. A weaker hiring backdrop could reduce growth in payroll-processing volumes, although lower employment growth may increase expectations for easier Federal Reserve policy. ADP private payrolls report

Insider Activity at Automatic Data Processing

In related news, VP Joseph Desilva sold 631 shares of the stock in a transaction that occurred on Thursday, September 3rd. The shares were sold at an average price of $282.87, for a total transaction of $178,490.97. Following the completion of the transaction, the vice president owned 18,824 shares of the company’s stock, valued at approximately $5,324,744.88. This trade represents a 3.24% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, VP David Kwon sold 2,414 shares of the business’s stock in a transaction that occurred on Thursday, July 30th. The shares were sold at an average price of $265.62, for a total value of $641,206.68. Following the completion of the sale, the vice president directly owned 9,660 shares in the company, valued at approximately $2,565,889.20. The trade was a 19.99% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last quarter, insiders have sold 33,773 shares of company stock valued at $9,450,629. 0.20% of the stock is owned by insiders.

Analyst Upgrades and Downgrades

A number of equities research analysts recently issued reports on the stock. Cantor Fitzgerald upped their price objective on shares of Automatic Data Processing from $295.00 to $310.00 and gave the company an “overweight” rating in a report on Monday, August 3rd. BMO Capital Markets lifted their target price on shares of Automatic Data Processing from $248.00 to $305.00 and gave the stock a “market perform” rating in a research note on Wednesday, July 29th. TD Cowen increased their price target on shares of Automatic Data Processing from $216.00 to $223.00 and gave the company a “hold” rating in a research note on Monday, July 6th. Guggenheim raised their price target on shares of Automatic Data Processing from $270.00 to $300.00 and gave the stock a “buy” rating in a report on Thursday, July 30th. Finally, Stifel Nicolaus raised their price target on shares of Automatic Data Processing from $260.00 to $285.00 and gave the stock a “hold” rating in a report on Thursday, July 30th. Three equities research analysts have rated the stock with a Buy rating, eight have given a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat.com, the company currently has an average rating of “Hold” and a consensus price target of $273.50.

Check Out Our Latest Stock Analysis on ADP

Automatic Data Processing Stock Performance

NASDAQ ADP opened at $277.62 on Monday. The stock has a fifty day simple moving average of $262.37 and a 200-day simple moving average of $230.34. The company has a current ratio of 1.05, a quick ratio of 1.05 and a debt-to-equity ratio of 0.82. The stock has a market cap of $110.29 billion, a PE ratio of 25.38, a P/E/G ratio of 2.52 and a beta of 0.82. Automatic Data Processing, Inc. has a twelve month low of $188.16 and a twelve month high of $302.68.

Automatic Data Processing (NASDAQ:ADP – Get Free Report) last issued its quarterly earnings data on Wednesday, July 29th. The business services provider reported $2.64 earnings per share (EPS) for the quarter, beating the consensus estimate of $2.59 by $0.05. The firm had revenue of $5.47 billion for the quarter, compared to analyst estimates of $5.44 billion. Automatic Data Processing had a net margin of 20.11% and a return on equity of 71.34%. Automatic Data Processing’s revenue was up 6.8% on a year-over-year basis. During the same period in the previous year, the firm earned $2.26 EPS. Automatic Data Processing has set its FY 2027 guidance at 12.120-12.340 EPS. Equities analysts anticipate that Automatic Data Processing, Inc. will post 12.26 earnings per share for the current year.

Automatic Data Processing Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, October 1st. Stockholders of record on Friday, September 11th will be issued a $1.70 dividend. This represents a $6.80 annualized dividend and a dividend yield of 2.4%. The ex-dividend date is Friday, September 11th. Automatic Data Processing’s dividend payout ratio is currently 62.16%.

Automatic Data Processing Company Profile

(Free Report)

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.

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