Ten-Year Tally: Automatic Data Processing Stock Delivers $28 Bil Gain
In the last decade, Automatic Data Processing (ADP) stock has returned $28 Bil back to its shareholders through cold, hard cash via dividends and buybacks. Let’s look at some numbers and compare how this payout power stacks up against the market’s biggest capital-return machines.
As it turns out, ADP stock has returned the 100th highest amount to shareholders in history.
| ADP | S&P Median | |
|---|---|---|
| Dividends | $15 Bil | $4.4 Bil |
| Share Repurchase | $12 Bil | $5.6 Bil |
| Total Returned | $28 Bil | $9.2 Bil |
| Total Returned as % of Current Market Cap | 27.2% | 25.6% |
Why should you care? Because dividends and share repurchases represent direct, tangible returns of capital to shareholders. They also signal management’s confidence in the company’s financial health and ability to generate sustainable cash flows. And there are more stocks like that. Here is a list of the top 10 companies ranked by total capital returned to shareholders via dividends and stock repurchases.
Portfolio beats stock-picking every time. Consider what could long-term performance for your portfolio be if you combined 10% commodities, 10% gold, and 2% crypto with equities.
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Top 10 Stocks By Total Shareholder Return
| Total Money Returned | As % Of Current Market Cap | via Dividends | via Share Repurchases | |
|---|---|---|---|---|
| AAPL | $847 Bil | 21.1% | $141 Bil | $706 Bil |
| MSFT | $364 Bil | 9.8% | $165 Bil | $199 Bil |
| GOOGL | $343 Bil | 9.9% | $12 Bil | $331 Bil |
| XOM | $212 Bil | 42.8% | $145 Bil | $67 Bil |
| WFC | $208 Bil | 75.2% | $59 Bil | $150 Bil |
| META | $178 Bil | 11.4% | $7.7 Bil | $171 Bil |
| JPM | $174 Bil | 19.9% | $0.0 | $174 Bil |
| ORCL | $161 Bil | 23.3% | $34 Bil | $126 Bil |
| JNJ | $157 Bil | 34.8% | $104 Bil | $52 Bil |
| CVX | $153 Bil | 58.0% | $97 Bil | $55 Bil |
For full ranking, visit Buybacks & Dividends Ranking
What do you notice here? The total capital returned to shareholders as a % of the current market cap appears inversely proportional to growth prospects for reinvestments. Stocks like Meta (META) and Microsoft (MSFT) are growing much faster, in a more predictable way, compared to the others, but they have returned a much lower fraction of their market cap to shareholders.
That’s the flip side to high capital returns. Sure, they are attractive, but you have to ask yourself the question: Am I sacrificing growth and sound fundamentals? With that in mind, let’s look at some numbers for ADP. (see Buy or Sell Automatic Data Processing Stock for more details)
Automatic Data Processing Fundamentals
- Revenue Growth: 7.1% LTM and 7.4% last 3-year average.
- Cash Generation: Nearly 20.1% free cash flow margin and 26.2% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for ADP was 6.6%.
- Valuation: Automatic Data Processing stock trades at a P/E multiple of 24.7
| ADP | S&P Median | |
|---|---|---|
| Sector | Industrials | – |
| Industry | Human Resource & Employment Services | – |
| PE Ratio | 24.7 | 23.5 |
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| LTM* Revenue Growth | 7.1% | 6.0% |
| 3Y Average Annual Revenue Growth | 7.4% | 5.5% |
| Min Annual Revenue Growth Last 3Y | 6.6% | -0.0% |
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| LTM* Operating Margin | 26.2% | 18.8% |
| 3Y Average Operating Margin | 25.8% | 18.2% |
| LTM* Free Cash Flow Margin | 20.1% | 13.6% |
*LTM: Last Twelve Months
That’s a good overview, but evaluating a stock from an investment perspective involves much more. That is exactly what Trefis High Quality Portfolio does. It is designed to reduce stock-specific risk while giving upside exposure.
ADP Historical Risk
ADP isn’t immune to big drops. It fell about 36% during the Dot-Com bubble and roughly the same in the Global Financial Crisis. The 2018 correction knocked it down nearly 19%, and the Covid sell-off hit it the hardest with close to a 39% plunge. The inflation shock wasn’t easy either, with a 22% dip. Solid fundamentals matter, but these numbers show even steady names can suffer when markets turn.
But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, and outlook changes. Read ADP Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.