Automatic Data Processing Dividend Increase
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On 12 November, Automatic Data Processing (ADP) increased its dividend by 10.39%, from $1.54 to $1.70 per share.
The dividend is payable on 1 January 2026 to shareholders of record on 12 December 2025.
ADP's contribution to DivGro's projected annual dividend income will increase by $62.40 to $576.
Source: Simply Safe Dividends
I own 80 shares of ADP at an average cost basis of $147.92 per share. Following this increase, my yield on cost is 4.60%. (ADP's forward yield is 2.66% at $255.22 per share).
Since I opened my position in February 2020, the stock has delivered a total return of 90%, including $2,034.90 in dividends. That's a splendid annualized rate of return of 12.8%!
ADP became DivGro's 53rd Home Run stock in October 2024 when the stock doubled my original capital outlay.
5-Year History of Dividend Payouts by Ex-Date
| 2020 | 2021 | 2022 | 2023 | 2024 | • | 2025 |
| $3.66 | $3.83 | $4.37 | $5.15 | $5.74 | ⬆ | $6.32✝ |
| 11.59% | 4.64% | 14.10% | 17.85% | 11.46% | ⬇ | 10.10% |
| 5-year DGR: | 11.84% | ⬇ | 11.54% | |||
✝projected, assuming no further changes
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Disclaimer: I'm not an investment professional or a licensed financial advisor. This article represents my personal views and decisions, which may not be appropriate for other investors. ...
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Mad About Money -- I inadvertently removed your comment -- so sorry about that. Here is your original comment and my reply:
"You note that your yield on cost is 4.60% based on your original purchase price — how do you think recent share-price appreciation (to roughly $255.22) affects the attractiveness of Automatic Data Processing (ADP) going forward? In other words — given the lower forward yield (~ 2.66 %), do you expect future dividend growth to compensate, and what dividend-growth rate would make ADP still compelling at today’s price?"
Yes, I think ADP is still a compelling buy. At today's price, the stock is modestly undervalued (by about 12%). Since I haven't updated my own database in a while, I'll quote GuruFocus dividend data:
Forward yield: 2.64%
5-Year DGR: 12.2%
5-Year YOC: 4.27%
Dividend Payout Ratio: 0.61
My ADP investment delivered a YOC of 4.6% over 5.75 years. Using GuruFocus' data, investing now could deliver 4.9% over the next 5.75 years.
(4.27*5.75/5 = 4.91)