Key Points:

• ADP has raised its dividend for 51 consecutive years, earning it the title of Dividend King.
• The company is expanding its cloud and AI offerings alongside its core payroll services.
• Fiscal 2026 earnings per share growth is expected to accelerate, potentially reaching 8% to 10% year-over-year.

While the market is buzzing with high-flying tech stocks and rapid disruptors, Automatic Data Processing (ADP) quietly thrives, offering steady growth and a legacy of reliable performance. Known for its payroll processing and human capital management (HCM) services, ADP has proven its resilience, not just by its consistent dividend increases but also by its ability to evolve into a tech-driven company. 

Senior financial experts from SkylineSFO highlight that ADP’s 51 consecutive years of dividend hikes and its expanding role in the AI and cloud space make it an attractive long-term investment for those seeking steady income and growth potential.

A Legacy of Consistent Dividend Growth

ADP is one of the few companies to earn the title of Dividend King, having raised its dividend for 51 consecutive years. In mid-November 2025, the company’s board approved a 10% increase in its quarterly dividend to $1.70 per share. 

This growth reflects ADP’s strong and consistent cash flow, primarily from its core payroll business, which remains mission-critical for businesses worldwide. Despite challenges like market slowdowns or recessions, payroll processing and human capital management continue to provide ADP with a solid foundation of recurring revenue.

A Tech-Driven Transformation

ADP, traditionally known for its payroll services, is increasingly positioning itself as a technology-driven business through its growing focus on cloud and AI initiatives. In 2025, ADP’s cloud business saw 7% year-over-year revenue growth, while AI-related revenue continued to rise at triple-digit growth rates. The company is leveraging its cloud infrastructure to provide AI-powered services such as model training, inference, and enterprise AI applications, which are more resource-intensive than traditional cloud services.

This shift marks a significant evolution for ADP, transitioning it from a payroll processor to a broader enterprise technology provider. For investors, this strategic shift opens up greater growth potential, moving beyond ADP’s traditional payroll processing business.

Leveraging High-Value Software and Embedded Payroll

ADP is increasingly integrating its payroll solutions into the software platforms businesses already use, reducing friction and expanding its distribution network. This shift opens up new market segments, particularly for small businesses. 

For mid-market and enterprise customers, ADP is focusing on modern platforms like ADP Lyric HCM, which has seen strong momentum. Lyric HCM exceeded business expectations for new bookings and continues to grow its pipeline, highlighting ADP’s push into higher-value enterprise software solutions beyond payroll services.

A Strong Dividend Yield with Earnings Growth Potential

Investors are likely drawn to ADP not just for its reliable dividend yield of 2.6%, but also for its potential for long-term earnings growth. With a low payout ratio of 59%, ADP has ample room to continue growing its dividend while reinvesting in the business to fund future growth.

The company has already raised its guidance for fiscal 2026, forecasting 8% to 10% earnings-per-share growth year-over-year. This growth forecast, combined with the potential for continued cloud and AI expansion, could make ADP an attractive choice for investors looking for a stock that combines dividend growth with capital appreciation.

Why ADP is a Top Pick for Long-Term Investors

ADP’s ability to compound quietly over time makes it a standout for long-term investors. While the market focuses on high-growth tech stocks, ADP’s steady growth, resilience, and strong dividend track record make it an excellent choice for wealth-building. 

Though there are risks, such as softness in payroll volumes or declining interest income if rates fall, ADP’s business model, based on trust and repetition, offers a solid foundation for growth. Furthermore, its AI and cloud initiatives provide new avenues for growth, positioning ADP to benefit from long-term trends in enterprise technology.

Conclusion: A Steady Compounder with Growth Potential

For long-term investors, ADP offers the best of both worlds: reliable dividends and growth potential driven by its increasing focus on cloud services and AI. Many analysts believe that ADP’s 51-year dividend streak, coupled with its strategic transformation into a tech platform, makes it a compelling pick for those seeking steady income and exposure to the AI and cloud sectors.

While the stock might not have the explosive growth of some newer tech companies, its consistent performance and long-term vision provide a solid foundation for future returns. As ADP continues to expand its offerings and reinvest in growth areas, it remains a smart, durable investment for those looking to grow wealth over the long term.