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The only thing passive income investors love more than a solid dividend stock is one that consistently raises its payout. Automatic Data Processing (NASDAQ: ADP), which has increased its dividend every year since 2012, checks off both boxes. This company provides payroll, accounting, tax administration, and human resource services for an estimated 16 million workers in over 140 countries.
According to Insider Monkey, ADP provides payroll services for one out of every six workers in the U.S. ADP's massive market share has put the company in a position to expand its services beyond payroll and accounting. It has branched out from that core business to provide clients with detailed analytics about key metrics like the median salary for various jobs.
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That salary data allows ADP clients to manage payroll expenses more effectively by offering wages competitive enough to attract top talent without overpaying. It's not the only value-added service ADP offers. The company's entire operating system is cloud-based, which eliminates the need for many ADP clients to hire accounting and HR staff. That also reduces expenses because hiring fewer employees means paying less for office space.
It explains why working with ADP is a win-win for most of its clients, who can put more of their time and energy into how to grow profits instead of bean counting. It also lays the groundwork for long-term client relationships, which translate into consistent revenue for ADP shareholders. ADP's combination of market share, ability to provide ancillary services, and convenience helps explain the company's success and the numbers show it.
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ADP's strong fiscal Q2 2025 earnings report where it posted $5.05 billion in revenue, which beat consensus earnings expectations by 8%. Per-share earnings of $2.35 topped the Street's expectation of $2.29. More importantly, ADP announced it was bullish on its prospects for fiscal-year 2025. The company expects to make $20.46 billion in revenue and predicts a 25% bump in its stock price.