52-Week Dividend Growth: 10%
52-Week Stock Appreciation: 26%
Dividend Yield: 2.4%
Don’t let this dull name fool you: ADP (ADP) is a winner on every level for your retirement portfolio every year. I listed the payroll processing and human resources management firm as a Hidden Dividend Gem back in May, and it continues to anchor a place in our Dependable Dividends list with 38 consecutive years of improved payouts.
It most recently logged a 10% dividend increase in January 2013, from 40 cents quarterly to 44 cents. But this solid company is also a stock-appreciation winner, besting the market’s 20% gains by nearly 6 percentage points year-to-date.
ADP’s most recent earnings weren’t spectacular, with Q4 profits falling 10% year-over-year on revenues that improved 7%. ADP telegraphed the hit earlier in the year, which included a 9 cents per share one-time non-cash goodwill related to the 2011 acquisition of ADP AdvancedMD, and lower yields on client fund balances.
Still, full-year profits were up 12% on revenues that improved by 6.5%, and ADP is projecting 8% to 10% earnings growth for the new fiscal year.
Plus, ADP is rock-solid financially. ADP is one of only four companies in the country whose debt is rated AAA by Standard & Poor’s, so its financial performance and structure is gold-plated. Meanwhile, it sits on $1.7 billion in cash with operating cash flow in excess of $500 million.