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Automatic Data Processing Inc. (ADP) Shares Cross 3% Yield Mark

By Dividend Channel Staff, Monday, August 8, 3:22 PM ET
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In trading on Monday, shares of Automatic Data Processing Inc. (NASDAQ:ADP) were yielding above the 3% mark based on its quarterly dividend (annualized to $1.44), with the stock changing hands as low as $45.85 on the day. Dividends are particularly important for investors to consider, because historically speaking dividends have provided a considerable share of the stock market's total return. To illustrate, suppose for example you purchased shares of the S&P 500 ETF (SPY) back on 12/31/1998 you would have paid $123.31 per share. Fast forward to 12/31/2010 and each share was worth $125.75 on that date, a mere $2.44 or 2% increase over all those years. But now consider that you collected a whopping $20.53 per share in dividends over the same period, increasing your return to 18.6%. Even with dividends reinvested, that only amounts to an average annual total return of about 1.4%; so by comparison collecting a yield above 3% would appear considerably attractive if that yield is sustainable. Automatic Data Processing Inc. (NASDAQ:ADP) is an S&P 500 company, giving it special status as one of the large-cap companies making up the S&P 500 Index.

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In general, dividend amounts are not always predictable and tend to follow the ups and downs of profitability at each company. In the case of Automatic Data Processing Inc., looking at the history chart for ADP below can help in judging whether the most recent dividend is likely to continue, and in turn whether it is a reasonable expectation to expect a 3% annual yield.

ADP Dividend History
Date Div*
06/08/11 0.360
03/09/11 0.360
12/08/10 0.360
09/08/10 0.340
06/09/10 0.340
03/10/10 0.340
12/09/09 0.340
09/09/09 0.330
06/10/09 0.330
03/11/09 0.330
12/10/08 0.330
09/10/08 0.290
06/11/08 0.290
03/12/08 0.290
12/12/07 0.290
09/12/07 0.230
06/13/07 0.230
04/02/07 4.925
03/07/07 0.230
12/06/06 0.230
09/13/06 0.185
06/07/06 0.185
03/08/06 0.185
12/07/05 0.185
09/07/05 0.155
06/08/05 0.155
03/10/05 0.155
12/08/04 0.155
09/08/04 0.140
06/09/04 0.140
03/11/04 0.140
12/10/03 0.140
09/10/03 0.120
06/11/03 0.120
03/12/03 0.120
12/11/02 0.120
09/11/02 0.115
06/12/02 0.115
03/13/02 0.115
12/12/01 0.115
06/06/01 0.103
03/07/01 0.103
12/07/00 0.103
09/13/00 0.088
06/07/00 0.088
03/08/00 0.088
12/08/99 0.088
09/08/99 0.076
06/09/99 0.075
03/10/99 0.075
12/09/98 0.152
09/09/98 0.132
06/10/98 0.132
03/11/98 0.132
12/10/97 0.132
09/10/97 0.115
06/11/97 0.077
03/12/97 0.077
12/11/96 0.077
09/11/96 0.067
06/12/96 0.067
03/13/96 0.067
12/13/95 0.133
09/13/95 0.117
* Data may be adjusted for splits; we are not responsible for data errors; always verify data with the company.

According to the ETF Finder at ETF Channel, ADP makes up 3.26% of the SPDR Morgan Stanley Technology ETF (AMEX:MTK) which is trading lower by about 5.5% on the day Monday.

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ADP operates in the Information Technology Services sector, among companies like PFSweb Inc (PFSW), and Aware Inc. (AWRE).


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