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Automatic Data Processing PE Ratio

: 37.08 (As of Today)
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The PE Ratio, or Price-to-Earnings ratio, or P/E Ratio, is a financial ratio used to compare a company's market price to its Earnings per Share (Diluted). As of today (2021-12-07), Automatic Data Processing's share price is $234.36. Automatic Data Processing's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Sep. 2021 was $6.32. Therefore, Automatic Data Processing's PE Ratio for today is 37.08.

Warning Sign:

Automatic Data Processing Inc stock PE Ratio (=36.74) is close to 10-year high of 37.64


The historical rank and industry rank for Automatic Data Processing's PE Ratio or its related term are showing as below:

NAS:ADP' s PE Ratio Range Over the Past 10 Years
Min: 15.84   Med: 26.41   Max: 37.64
Current: 37.14

15.84
37.64

During the past 13 years, the highest PE Ratio of Automatic Data Processing was 37.64. The lowest was 15.84. And the median was 26.41.


NAS:ADP's PE Ratio is ranked lower than
73% of the 730 Companies
in the Business Services industry.

( Industry Median: 20.50 vs. NAS:ADP: 37.14 )

Automatic Data Processing's Earnings per Share (Diluted) for the three months ended in Sep. 2021 was $1.65. Its Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Sep. 2021 was $6.32.

As of today (2021-12-07), Automatic Data Processing's share price is $234.36. Automatic Data Processing's EPS without NRI for the trailing twelve months (TTM) ended in Sep. 2021 was $6.32. Therefore, Automatic Data Processing's PE Ratio without NRI for today is 37.08.

During the past 13 years, Automatic Data Processing's highest PE Ratio without NRI was 37.64. The lowest was 15.90. And the median was 26.97.

Automatic Data Processing's EPS without NRI for the three months ended in Sep. 2021 was $1.65. Its EPS without NRI for the trailing twelve months (TTM) ended in Sep. 2021 was $6.32.

During the past 12 months, Automatic Data Processing's average EPS without NRI Growth Rate was 9.70% per year. During the past 3 years, the average EPS without NRI Growth Rate was 12.60% per year. During the past 5 years, the average EPS without NRI Growth Rate was 13.50% per year. During the past 10 years, the average EPS without NRI Growth Rate was 10.60% per year.

During the past 13 years, Automatic Data Processing's highest 3-Year average EPS without NRI Growth Rate was 21.80% per year. The lowest was -9.00% per year. And the median was 13.30% per year.

Automatic Data Processing's EPS (Basic) for the three months ended in Sep. 2021 was $1.66. Its EPS (Basic) for the trailing twelve months (TTM) ended in Sep. 2021 was $6.34.


Automatic Data Processing PE Ratio Historical Data

The historical data trend for Automatic Data Processing's PE Ratio can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Automatic Data Processing Annual Data
Trend Jun12 Jun13 Jun14 Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21
PE Ratio
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 25.81 31.56 31.55 26.12 32.72

Automatic Data Processing Quarterly Data
Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21
PE Ratio Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 24.22 30.54 32.66 32.72 31.63

Competitive Comparison

For the Staffing & Employment Services subindustry, Automatic Data Processing's PE Ratio, along with its competitors' market caps and PE Ratio data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Automatic Data Processing PE Ratio Distribution

For the Business Services industry and Industrials sector, Automatic Data Processing's PE Ratio distribution charts can be found below:

* The bar in red indicates where Automatic Data Processing's PE Ratio falls into.



Automatic Data Processing PE Ratio Calculation

The PE Ratio, or Price-to-Earnings ratio, or P/E Ratio, is a financial ratio used to compare a company's market price to its Earnings per Share (Diluted). It is the most widely used ratio in the valuation of stocks.

Automatic Data Processing's PE Ratio for today is calculated as

PE Ratio=Share Price/Earnings per Share (Diluted) (TTM)
=234.36/6.320
=37.08

Automatic Data Processing's Share Price of today is $234.36.
Automatic Data Processing's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Sep. 2021 adds up the quarterly data reported by the company within the most recent 12 months, which was $6.32.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

It can also be calculated from the numbers for the whole company:


There are at least three kinds of PE Ratios used by different investors. They are Trailing Twelve Month PE Ratio or PE Ratio (TTM), Forward PE Ratio, or PE Ratio without NRI. A new PE Ratio based on inflation-adjusted normalized PE Ratio is called Shiller PE Ratio, after Yale professor Robert Shiller.

In the calculation of PE Ratio, the earnings per share used are the earnings per share over the past 12 months. For Forward PE Ratio, the earnings are the expected earnings for the next twelve months. In the case of PE Ratio without NRI, the reported earnings less the non-recurring items are used.

For Shiller PE Ratio, the earnings of the past 10 years are inflation-adjusted and averaged. Since it looks at the average over the last 10 years, Shiller PE Ratio is also called PE10.


Automatic Data Processing  (NAS:ADP) PE Ratio Explanation

The PE Ratio can be viewed as the number of years it takes for the company to earn back the price you pay for the stock. For example, if a company earns $2 a share per year, and the stock is traded at $30, the PE Ratio is 15. Therefore it takes 15 years for the company to earn back the $30 you paid for its stock, assuming the earnings stays constant over the next 15 years.

In real business, earnings never stay constant. If a company can grow its earnings, it takes fewer years for the company to earn back the price you pay for the stock. If a company's earnings decline it takes more years. As a shareholder, you want the company to earn back the price you pay as soon as possible. Therefore, lower P/E stocks are more attractive than higher P/E stocks so long as the PE Ratio is positive. Also for stocks with the same PE Ratio, the one with faster growth business is more attractive.

If a company loses money, the PE Ratio becomes meaningless.

To compare stocks with different growth rates, Peter Lynch invented a ratio called PEG Ratio. PEG Ratio is defined as the PE Ratio divided by the growth ratio. He thinks a company with a PE Ratio equal to its growth rate is fairly valued. Still he said he would rather buy a company growing 20% a year with a PE Ratio of 20, instead of a company growing 10% a year with a PE Ratio of 10.

Because the PE Ratio measures how long it takes to earn back the price you pay, the PE Ratio can be applied to the stocks across different industries. That is why it is the one of the most important and widely used indicators for the valuation of stocks.

Similar to the PE Ratio without NRI or PS Ratio or Price-to-Operating-Cash-Flow or Price-to-Free-Cash-Flow , the PE Ratio measures the valuation based on the earning power of the company. This is where it is different from the PB Ratio , which measures the valuation based on the company's balance sheet.


Be Aware

Investors need to be aware that the PE Ratio can be misleading a lot of times, especially when the underlying business is cyclical and unpredictable. As Peter Lynch pointed out, cyclical businesses have higher profit margins at the peaks of the business cycles. Their earnings are high and PE Ratios are artificially low. It is usually a bad idea to buy a cyclical business when the PE Ratio is low. A better ratio to identify the time to buy a cyclical businesses is the PS Ratio .

PE Ratio can also be affected by non-recurring-items such as the sale of part of businesses. This may increase for the current year or quarter dramatically. But it cannot be repeated over and over. Therefore PE Ratio without NRI is a more accurate indication of valuation than PE Ratio.


Automatic Data Processing PE Ratio Related Terms

Thank you for viewing the detailed overview of Automatic Data Processing's PE Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.


Automatic Data Processing Business Description

Automatic Data Processing logo
Industry
Industrials » Business Services NAICS : 561499 SIC : 7389
Traded in Other Exchanges
Address
One ADP Boulevard, Roseland, NJ, USA, 07068
ADP competes in the human resources administration services industry. It provides services that satisfy companies' human resources needs, such as payroll processing and benefits administration. ADP was founded in 1949 and has its headquarters in Roseland, New Jersey.
Executives
Albinson Brock officer: Corp. VP ONE ADP BOULEVARD ROSELAND NJ 07068
Bonarti Michael A officer: Corporate Vice President ONE ADP BOULEVARD ROSELAND NJ 07068
Michaud Brian L. officer: Corp VP ONE ADP BOULEVARD ROSELAND NJ 07068
Rodriguez Carlos A officer: President & CEO 10200 SUNSET DRIVE MIAMI FL 33173
Kutam Sreenivasa officer: Corp VP ONE ADP BOULEVARD ROSELAND NJ 07068
Brown Laura G officer: Corp. VP ONE ADP BOULEVARD ROSELAND NJ 07068
Desilva Joseph officer: Corp VP ONE ADP BOULEVARD ROSELAND NJ 07068
Mcguire Don officer: Corp VP ONE ADP BOULEVARD ROSELAND NJ 07068
Weinstein Donald officer: Corporate VP ONE ADP BOULEVARD ROSELAND NJ 07068
Sackman Stuart officer: Corp. VP ONE ADP BOULEVARD ROSELAND NJ 07068
Black Maria officer: Corp. VP ONE ADP BOULEVARD ROSELAND NJ 07068
Dyson Deborah L officer: Corp. VP ONE ADP BOULEVARD ROSELAND NJ 07068
Politi Douglas W officer: Corp. VP ONE ADP BOULEVARD ROSELAND NJ 07068
Ayala John officer: Corp. VP ONE ADP BOULEVARD ROSELAND NJ 07068
Eberhard Michael C officer: Corporate Vice President ONE ADP BOULEVARD ROSELAND NJ 07068

Automatic Data Processing Headlines

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