ADP Ranks High in Warren Buffett's Fundamental Strategy

Automatic Data Processing Inc (ADP) shows strong fundamentals, surpassing many investor criteria under Warren Buffett's Patient Investor model, which may positively influence its stock price.

Date: 07-09-2024

AI Rating: 8

Fundamental Overview of ADP

Automatic Data Processing Inc (ADP) is highlighted as a strong candidate for investment based on the Patient Investor model derived from Warren Buffett's strategy. This approach emphasizes seeking companies with long-term, predictable profitability and low debt profiles.

Earnings Predictability, Debt Service, and Returns

Earnings Predictability:	PASS
Debt Service:	PASS
Return on Equity:	PASS
Return on Total Capital:	PASS
Free Cash Flow:	PASS

This strong track record in critical areas, such as earnings predictability, indicates that ADP has stable earnings which can lead to consistent performance in stock prices. The management of debt is another attractive feature, showing that the company does not over-leverage itself, likely making it less risky for investors.

Free Cash Flow and Share Buybacks

Free Cash Flow:	PASS
Share Repurchase:	PASS

Free Cash Flow is another critical indicator, showing that ADP can manage cash generation effectively, providing opportunities for share buybacks, which can ultimately enrich shareholders and drive stock prices higher.

Overall Rating

The overall high score of 93% based on the Patient Investor model underscores a strong interest in ADP from long-term investors. Given the robust fundamentals and favorable ratings across multiple critical areas, it is expected that the stock could experience positive movement on the market.

Stocks: ADP