ADP Just Raised Its Dividend 10% for the 50th Year in a Row

"Automatic Data Processing ( NASDAQ:ADP) just raised its quarterly dividend by 10%, marking the company's 50th consecutive year of dividend increases. That puts ADP in Dividend King territory, an elite group of fewer than 50 companies with half a century of uninterrupted dividend growth. For retirees and income investors, this is the kind of track record that matters. A 50-Year Dividend Growth Machine"

"ADP's quarterly dividend now sits at $1.70 per share, up from $1.54, translating to an annual run rate of $6.80 and a yield of roughly 3.0%. The compounding effect is striking. In 1999, ADP's annual dividend was just $0.305. Today it's $6.80, a 2,128% increase over 27 years, representing a compound annual growth rate of approximately 12.5%. Over the past five years, the dividend has grown at a 12% annual clip."

"ADP generated $4.8 billion in free cash flow in fiscal 2025, against $2.4 billion in dividend payments - a free cash flow payout ratio of 50.3%, well below the 70% threshold considered elevated. The dividend was covered 1.99 times from free cash flow. On an earnings basis, the payout ratio sits at approximately 61% based on trailing twelve-month EPS of $10.41 and an annual dividend of $6.32. Both metrics leave room for continued dividend growth."

Automatic Data Processing raised its quarterly dividend 10% to $1.70, creating a $6.80 annualized payout and about a 3.0% yield. The dividend increased from $0.305 in 1999 to $6.80 today, a 2,128% rise and roughly 12.5% compound annual growth, with a five-year growth rate near 12%. ADP services payroll for over 1.1 million clients across 140+ countries, providing recession-resistant revenue. Fiscal 2025 free cash flow was $4.8 billion versus $2.4 billion in dividends, a 50.3% free cash flow payout ratio and about a 61% earnings payout, leaving room for continued growth.

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