Automatic Data Processing, Inc. (NASDAQ:ADP) has quietly built one of the better dividend records in the market. The company has now increased its dividend for 51 straight years. That is impressive on its own, but the more important point is that the business continues to generate the earnings and cash needed to support those increases.
The company currently pays $1.70 per share every quarter, giving investors $6.80 in annual dividends. ADP raised the payout by 10% in November 2025. For a mature company, that is still a meaningful increase and suggests management remains confident in the business and its cash-generating ability.
Stock market data. Photo by Photo by Alesia Kozik
The latest earnings also give dividend investors plenty to work with. In the fourth quarter of fiscal 2026, revenue grew 7% year over year to $5.47 billion. Adjusted EPS climbed to $2.64 from $2.26, while GAAP net income rose 7% to $978.6 million. Diluted EPS increased 10% to $2.45.The third quarter showed a similar trend. Revenue was up 7% to $5.9 billion, net earnings rose 9% to $1.4 billion, and adjusted diluted EPS increased 10% to $3.37. For the full fiscal year, diluted EPS reached $10.94, compared with $9.98 in fiscal 2025.
Strong Cash Flow Supports the Dividend
If there is one part of Automatic Data Processing, Inc. (NASDAQ:ADP)’s dividend story that stands out, it is cash flow. The company generated about $5.44 billion in operating cash flow during fiscal 2026, up from $4.94 billion a year earlier. At the same time, it paid $2.63 billion in dividends and spent $2.08 billion on share repurchases.
The numbers show that the dividend is not consuming an uncomfortable amount of cash. Less than half of operating cash flow went to dividends in fiscal 2026. The annual payout of $6.80 represents about 62% of diluted EPS, which is a fairly normal level for a mature business with recurring revenue. More importantly, the cash-flow coverage gives ADP a useful cushion.
Bull Case
For dividend investors, Automatic Data Processing, Inc. (NASDAQ:ADP)’s biggest strength may simply be how consistent the business has been. It has continued raising its dividend through different economic cycles, and earnings are still growing. Management expects revenue to increase 5% to 6% in fiscal 2027, with adjusted EPS growth of 9% to 11%. If those targets are met, Automatic Data Processing, Inc. (NASDAQ:ADP) should have room to keep increasing its dividend at a healthy pace.
There is also something reassuring about the company’s core business. Payroll and HR services are not things most companies can simply stop using when the economy weakens. That gives ADP a recurring revenue base and some protection against economic slowdowns. The company also benefits from interest earned on client funds, which adds another stream of income. ADP’s capital-allocation strategy is another positive. Management can return excess cash through both dividends and share buybacks. As long as earnings and cash flow keep moving higher, that flexibility should allow ADP to reward shareholders without stretching the business too far.
