With more than four consecutive decades of dividend increases, Automatic Data Processing (ADP) is one of my favorite dividend aristocrats. The company’s excellent dividend growth track record is the result of its reliable business model.
ADP benefits from providing mission-critical services, generating a high percentage of recurring revenues, maintaining a strong client retention rate, running asset-light operations, and throwing off loads of free cash flow each year. Although ADP’s stock has nearly doubled the market’s performance over the last decade, the company has plenty of room for continued growth.
Not surprisingly, ADP scores extremely well for Dividend Safety and Dividend Growth and is the type of business I like to own in our Top 20 Dividend Stocks portfolio. Let’s take a closer look at the business.
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