Passive income is a dream for many investors, and dividend stocks are a popular choice for those looking to generate consistent returns without actively managing their investments. One such dividend stock that has caught the attention of income-seeking investors is Automatic Data Processing (ADP). ADP has a track record of increasing its dividend payout every year since 2012, making it an attractive option for those looking to build a passive income stream.
ADP is a leading provider of payroll, accounting, tax administration, and human resource services for millions of workers worldwide. According to Insider Monkey, ADP serves one out of every six workers in the U.S., highlighting the company’s massive market share in the industry. This market dominance has allowed ADP to expand its services beyond payroll and accounting, offering clients valuable insights and analytics to help them manage their workforce more effectively.
One of the key value propositions of ADP is its cloud-based operating system, which eliminates the need for many clients to hire additional accounting and HR staff. This not only saves costs for clients but also allows them to focus on growing their businesses instead of getting bogged down in administrative tasks. This convenience and value-added services have helped ADP build long-term client relationships, translating into consistent revenue for the company and its shareholders.
In its recent fiscal Q2 2025 earnings report, ADP exceeded revenue and earnings expectations, demonstrating strong performance and outlook for the future. The company expects to continue its growth trajectory, with a projected revenue of $20.46 billion and a 25% increase in its stock price. This positive outlook has already been reflected in ADP’s stock price, which has seen a 5% surge since the beginning of the year.
When it comes to dividends, ADP has been on a five-year streak of increasing its dividend payout, which it pays out quarterly. Currently, ADP’s dividend yield is estimated to be 1.97%, making it an attractive option for income-seeking investors. Since 2012, ADP has steadily increased its quarterly dividend from $0.04 to $1.54, showcasing its commitment to rewarding shareholders with consistent and growing payouts.
While ADP may not have the glamour of big tech stocks, its reliable dividends and steady growth make it a compelling choice for investors looking for passive income. With a strong track record of dividend increases and a positive outlook for the future, ADP is well-positioned to continue delivering value to its shareholders.
In conclusion, ADP’s consistent dividend increases, strong financial performance, and market leadership make it a standout choice for investors seeking passive income. With a focus on providing value-added services to clients and a commitment to rewarding shareholders, ADP is a dividend stock worth considering for those looking to build a reliable income stream.
