Shares of Automatic Data Processing, Inc. (ADP) reached a new 52-week high of $89.70 on Feb 25. The human capital management and integrated computing solutions provider has been gaining momentum of late, following modest second-quarter fiscal 2015 results and a strengthening human capital management (HCM) business.
Automatic Data Processing has returned about 13% in the last one-year period with a year-to-date return of about 6.8%. In comparison, the S&P 500 jumped 14.6% and 2.7%, respectively, during the same period. Average volume of shares traded over the last three months stands at approximately 2.1 million.
Furthermore, the company has delivered a positive average earnings surprise of 1.11% over the past four quarters. This Zacks Rank #3 (Hold) stock has a market cap of approximately $42.3 billion and a long-term expected earnings growth rate of 9.8%.
Key Growth Catalysts
Automatic Data Processing reported modest second-quarter fiscal 2015 results. Earnings per share beat the Zacks Consensus Estimate, although revenues missed the consensus. In addition, the company provided an encouraging outlook for fiscal 2015 with earnings projected to grow in double digits and revenues in high-single digits.
Moreover, this week, Automatic Data Processing revealed that it has started a ‘center of excellence’ in Bucharest, Romania. The new center will be the company’s global delivery center for HCM services. A robust product portfolio has allowed Automatic Data Processing to hold a premier position in the payroll processing and HCM market. The new center will further strengthen the company’s prowess in the domain while opening up more avenues for growth.
Recently, Automatic Data Processing was once again recognized as the best company in Financial Data Services by FORTUNE magazine in the ‘World's Most Admired Companies’ list for 2015.
The company’s high retention rate is a key factor that contributes to the huge recurring revenue base. In addition, the spin-off of its dealer services segment is a major positive as it enables the company to focus better on its HCM solutions. The ongoing recovery in the job market offers more reason for optimism.
Other Stocks
Some other stocks that have recently been in the news for hitting 52-week highs are Equifax Inc. (EFX), Amazon.com Inc. (AMZN) and Apple Inc. (AAPL).
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