ADP
9/9 ScoreAutomatic Data Processing, Inc.
Analysis Date: February 21, 2026
Automatic Data Processing, Inc. provides cloud-based human capital management solutions worldwide. It operates in two segments, Employer Services and Professional Employer Organization (PEO). The Employer Services segment offers strategic, cloud-based platforms, and human resources (HR) outsourcing solutions. Its offerings include payroll, benefits administration, talent management, HR management, workforce management, insurance, retirement, and compliance services, as well as integrated HCM solutions. The PEO Services segment provides HR outsourcing solutions to small and mid-sized businesses through a co-employment model. This segment offers benefits package, protection and compliance, talent engagement, expertise, comprehensive outsourcing, and recruitment process outsourcing services. The company was founded in 1949 and is headquartered in Roseland, New Jersey.
Buffettology Criteria
All 9 of 9 criteria passed
High ROE
Return on Equity > 12%
Value: 68.3%
High ROIC
Return on Invested Capital > 9%
Value: 24.0%
Cash Machine
FCF / Assets > 5%
Value: 8.9%
Fair Valuation
Earnings Yield > 3.5%
Value: 4.9%
Share Buybacks
Share Count is Dropping
Value: -0.9%
Defensible Moat
Gross Profit Margin > 40%
Value: 48.4%
Simple Business
Not in a speculative sector (e.g., Biotech)
Value: Industrials
Conservative Debt
Debt to Equity < 1.5
Value: 0.72x
Consistent Growth
5-Year Growth is Positive
Value: 75.0%
Analysis Summary
This is a promising collection of data. That 68.3% ROE and 24.0% ROIC tell me ADP is adept at turning shareholder capital into profits, a true cash-generating machine. Coupled with a strong moat and conservative debt, this business looks like it's built to weather storms and deliver long-term value.
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