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Strategies & Market Trends : Young and Older Folk Portfolio
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To: SeeksQuality who wrote (21799)11/3/2025 10:26:08 AM
From: Fireball Dividend3 Recommendations

Recommended By
chowder
Markbn
Tam3262

   of 23248
 
ADP: Thank you and to all others who were so kind to respond about ADP.

I just made up my mind and re-installed a new 1.6 % position size in ADP right from the batch.
I´m light anyway in industrials, if this is really the right sector for ADP.

I like the very high quality ratings on VL and what I read there and on M* and recognise that the share price of PAYX got under pressure in the same way over the last months.
So for me so far it looks that the valuation got ahead of itself in this sub sector.

S&P: AA- VL: 1 / A++ 100 / 90 / 95 Timeliness: 3 Technical: 2

M*: Wide Moat M*FV: USD 305

M* from Oct 29, 2025:
We reiterate our fair value estimate for wide-moat ADP of $305 per share as this earnings report does nothing to alter our long-term view surrounding the business. At the current share price, we continue to view ADP as slightly undervalued.
Management reaffirmed full-year guidance with respect to its growth and profitability expectations. Total revenue is expected to grow between 5% and 6% year over year while non-GAAP operating margin is expected to improve by between 50 and 70 basis points. ES is expected to generate between 5% and 6% growth consistent with the prior outlook. While U.S. pays per control is now expected to be flat year over year, new business bookings between 4% and 7% will compensate for same-store hiring toward the lower end of the previously provided range.

I also like that the next dividend raise of this "dividend growth monster" should be published very soon within the next few days, which should bring the new dividend yield to around 2.58 % which looks attractive enough for me, compared to a average dividend yield of 2.03 % over the last 5 years.

Good luck to you all.
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