Automatic Data Processing Vice President Sells $234,000 Stock, Cuts Stake by 6.98%
On January 6, Automatic Data Processing VP David Kwon sold 900 shares at an average price of $260 for $234,000, reducing his ownership by 6.98%. After the sale, he retains 11,993 shares valued at approximately $3.12 million.
1. Executive Stock Sale Highlights Insider Confidence
On January 6th, ADP Vice President David Kwon sold 900 shares of Automatic Data Processing stock at an average price of $260 per share, resulting in proceeds of $234,000. Following the transaction, Kwon’s direct ownership stands at 11,993 shares—approximately $3.12 million in value—representing a 6.98% reduction in his stake. The sale was disclosed in an SEC filing, underscoring compliance and transparency within the company’s insider trading policies.
2. Q3 Results and FY 2026 Guidance Exceed Estimates
In its most recent quarter, ADP reported earnings per share of $2.49, surpassing consensus estimates of $2.44, while revenue reached $5.18 billion versus projections of $5.14 billion—a 7.1% year-over-year increase. Net margin held at 19.79%, and return on equity soared to 70.63%. For fiscal year 2026, management has set an EPS guidance range of $10.811 to $11.011, above the sell-side consensus of $9.93, reflecting confidence in continued growth across its human capital management and payroll services segments.
3. Strong Balance Sheet and Valuation Metrics Support Stability
ADP maintains a quick ratio and current ratio of 1.05 each, paired with a conservative debt-to-equity ratio of 0.62. The company’s market capitalization stands at $107.6 billion, with a trailing P/E of 26.26 and a beta of 0.86, indicating lower volatility versus the broader market. Technical indicators show a 50-day simple moving average of $257.60 and a 200-day average of $282.93, reflecting recent trading ranges within its 12-month low of $247.18 and high of $329.93.
4. Dividend Increase and Institutional Activity Signal Long-Term Support
ADP raised its quarterly dividend from $1.54 to $1.70 per share, translating to an annualized payout of $6.80 and a yield of 2.6%, with a payout ratio currently at 67.13%. During the fourth quarter, institutional investors increased their stakes: Brighton Jones LLC boosted its position by 92.1%, Bison Wealth LLC by 22.8%, Signature Estate & Investment Advisors by 5.6%, and Advisory Alpha LLC by 130.2%. SCS Capital Management established a new position, contributing to a total institutional ownership of 80.03%. Analysts maintain a consensus “Hold” rating, with an average price target of $306.42 based on two Buy, nine Hold, and two Sell recommendations.