The Employees Retirement System of Texas has acquired a new stake in Automatic Data Processing, Inc. (NASDAQ: ADP), according to Holdings Channel.com. In the second quarter of 2023, the Texas retirement system purchased 22,200 shares of the business services provider, valued at approximately $6.8 million.
This investment aligns with a broader trend among institutional investors, many of whom have recently adjusted their positions in ADP. For instance, Jacobsen Capital Management increased its holdings by 3.8% during the same period, bringing its total to 907 shares valued at $280,000. Similarly, Signature Wealth Management Group boosted its stake by 2.3%, now holding 1,450 shares worth $447,000. Bangor Savings Bank added 0.7% to its position, resulting in ownership of 4,907 shares valued at $1.5 million.
Ameritas Advisory Services LLC also increased its stake by 2.1%, owning 1,629 shares valued at $502,000 after acquiring additional shares. Syntegra Private Wealth Group LLC raised its position by 4.7%, now holding 779 shares worth $238,000. Overall, institutional investors and hedge funds currently own 80.03% of ADP’s stock.
In related news, company insiders have been active in the market. On September 3, Vice President Joseph Desilva sold 4,614 shares at an average price of $296.57, totaling approximately $1.37 million. Following this transaction, Desilva’s holdings decreased by 20.83% to 17,536 shares valued at around $5.2 million. Another insider, Vice President Christopher D’ambrosio, sold 597 shares on September 10 at an average price of $296.90, amounting to $177,249.30. This sale reduced D’ambrosio’s ownership by 5.36%, leaving him with 10,541 shares valued at approximately $3.13 million.
Over the last ninety days, insiders sold a total of 52,516 shares, valued at about $15.6 million. Currently, 0.20% of ADP’s stock is owned by insiders.
Recent Earnings and Dividend Increase
Automatic Data Processing recently reported its earnings for the quarter ending October 29, 2023. The company posted earnings per share (EPS) of $2.49, surpassing analysts’ expectations of $2.44 by $0.05. The business generated revenue of $5.18 billion, exceeding forecasts of $5.14 billion. Year-on-year, ADP’s revenue increased by 7.1% compared to the same quarter last year, when it recorded an EPS of $2.33.
Looking ahead, ADP has set its fiscal year 2026 guidance at EPS between $10.811 and $11.011. Analysts predict the company will achieve an EPS of $9.93 for the current fiscal year.
In a move to reward shareholders, ADP announced a quarterly dividend of $1.70 per share, payable on January 1, 2024. Shareholders of record on December 12, 2023, will receive this dividend, marking an increase from the previous quarterly dividend of $1.54. This annualizes to a total of $6.80 and results in a dividend yield of 2.7%. The company’s dividend payout ratio stands at 67.13%.
Market Analyst Perspectives
Several research analysts have recently issued evaluations of ADP shares. Citigroup initiated coverage with a “neutral” rating and a price target of $303.00. Weiss Ratings reaffirmed a “buy (B-)” rating for the stock, while Wells Fargo & Company lowered its target from $288.00 to $272.00, assigning an “underweight” rating. JPMorgan Chase & Co. also cut its price target for ADP from $340.00 to $295.00 with an “underweight” rating.
According to MarketBeat, the consensus rating for ADP is “Hold,” with an average target price of $312.67. Currently, three analysts rate the stock as a Buy, nine as Hold, and two as Sell.
Automatic Data Processing, Inc. specializes in providing cloud-based human capital management solutions globally, operating through two segments: Employer Services and Professional Employer Organization (PEO). The Employer Services segment focuses on strategic, cloud-based platforms and HR outsourcing solutions.
For more detailed insights and updates on Automatic Data Processing, visit HoldingsChannel.com for the latest filings and insider trades related to the company.
