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5 Reasons You Should Add ADP Stock to Your Portfolio
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Automatic Data Processing, Inc. (ADP - Free Report) is an outsourcing stock that has performed well over the past three months and has the potential to carry the momentum forward. Therefore, if you have not taken advantage of ADP’s share price appreciation yet, it’s time you add the stock to your portfolio.
Let’s take a look at factors that make the stock an attractive pick.
Share Price Performance
A glimpse of the company’s price trend reveals that the stock has had an impressive run on the bourse over the past three months. ADP has rallied 26% compared with the industry’s 22.2% rally.
Solid Rank
ADP sports a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or #2 offer attractive investment opportunities for investors. Thus, the company is a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions
12 estimates for fiscal 2021 moved north over the past 60 days versus no southward revision, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for fiscal 2021 climbed 11.9%.
Positive Earnings Surprise History
ADP has an impressive earnings surprise history. The company outpaced the consensus mark in each of the trailing four quarters, delivering an average beat of 17.2%.
Automatic Data Processing, Inc. Price and EPS Surprise
ADP’s three-tier business strategy helps it grow its strong position as a human capital management (“HCM”) technology and services provider. The company is focused on delivering a complete suite of cloud-based HCM and HR Outsourcing solutions. It is expanding its international HCM and HRO businesses with established local, in-country software solutions and cloud-based multi-country solutions.
ADP has been able to accelerate DataCloud penetration, and increase investment in inside sales, mid-market migrations and service alignment initiatives through its ongoing transformation measures. Through these initiatives, the company continues to innovate, improve operations and expand its margins.
Strategic acquisitions of companies like Celergo, WorkMarket, Global Cash Card and The Marcus Buckingham Company have strengthened ADP’s customer base and are helping it expand operations in international markets. The company continues to pursue acquisitions that strategically fit its overall business mix and are easy to integrate over the long term. Owing to these, ADP’s share price has increased 2.8% year to date.
Long-term earnings (three to five years) growth rate for Republic Services, Gartner and Insperity is estimated at 9.4%, 13.5% and 15%, respectively.
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5 Reasons You Should Add ADP Stock to Your Portfolio
Automatic Data Processing, Inc. (ADP - Free Report) is an outsourcing stock that has performed well over the past three months and has the potential to carry the momentum forward. Therefore, if you have not taken advantage of ADP’s share price appreciation yet, it’s time you add the stock to your portfolio.
Let’s take a look at factors that make the stock an attractive pick.
Share Price Performance
A glimpse of the company’s price trend reveals that the stock has had an impressive run on the bourse over the past three months. ADP has rallied 26% compared with the industry’s 22.2% rally.
Solid Rank
ADP sports a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or #2 offer attractive investment opportunities for investors. Thus, the company is a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions
12 estimates for fiscal 2021 moved north over the past 60 days versus no southward revision, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for fiscal 2021 climbed 11.9%.
Positive Earnings Surprise History
ADP has an impressive earnings surprise history. The company outpaced the consensus mark in each of the trailing four quarters, delivering an average beat of 17.2%.
Automatic Data Processing, Inc. Price and EPS Surprise
Automatic Data Processing, Inc. price-eps-surprise | Automatic Data Processing, Inc. Quote
Growth Factors
ADP’s three-tier business strategy helps it grow its strong position as a human capital management (“HCM”) technology and services provider. The company is focused on delivering a complete suite of cloud-based HCM and HR Outsourcing solutions. It is expanding its international HCM and HRO businesses with established local, in-country software solutions and cloud-based multi-country solutions.
ADP has been able to accelerate DataCloud penetration, and increase investment in inside sales, mid-market migrations and service alignment initiatives through its ongoing transformation measures. Through these initiatives, the company continues to innovate, improve operations and expand its margins.
Strategic acquisitions of companies like Celergo, WorkMarket, Global Cash Card and The Marcus Buckingham Company have strengthened ADP’s customer base and are helping it expand operations in international markets. The company continues to pursue acquisitions that strategically fit its overall business mix and are easy to integrate over the long term. Owing to these, ADP’s share price has increased 2.8% year to date.
Other Stocks to Consider
Some other top-ranked stocks in the broader Zacks Business Services sector are Republic Services (RSG - Free Report) , Gartner (IT - Free Report) and Insperity (NSP - Free Report) , each carrying a Zacks Rank #2 (Buy).
Long-term earnings (three to five years) growth rate for Republic Services, Gartner and Insperity is estimated at 9.4%, 13.5% and 15%, respectively.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana. Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>