Stock Analysis on Net
Stock Analysis on Net

Automatic Data Processing Inc. (NASDAQ:ADP)

Price to FCFE (P/FCFE)

Intermediate level

Free Cash Flow to Equity (FCFE)

Automatic Data Processing Inc., FCFE calculation

US$ in thousands

Microsoft Excel LibreOffice Calc
12 months ended: Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Net earnings 2,466,500  2,292,800  1,620,800  1,733,400  1,492,500  1,452,500 
Net noncash charges 1,679,700  1,601,300  986,900  490,800  496,300  602,100 
Changes in operating assets and liabilities, net of effects from acquisitions and divestitures of businesses (1,120,000) (1,205,800) (92,500) (98,300) (128,900) (149,000)
Net cash flows provided by operating activities 3,026,200  2,688,300  2,515,200  2,125,900  1,859,900  1,905,600 
Capital expenditures (172,700) (162,000) (206,100) (240,200) (168,500) (158,800)
Additions to intangibles (443,700) (404,500) (264,700) (230,400) (217,500) (176,700)
Proceeds from debt issuance —  —  —  —  1,998,300  — 
Payments of debt (2,200) (2,100) (7,300) (2,000) (1,500) (2,300)
Net proceeds (payments) related to reverse repurchase agreements (248,400) 262,000  —  —  —  — 
Net proceeds from issuance (repayments) of commercial paper —  —  —  —  —  (2,173,000)
Free cash flow to equity (FCFE) 2,159,200  2,381,700  2,037,100  1,653,300  3,470,700  (605,200)

Based on: 10-K (filing date: 2020-08-05), 10-K (filing date: 2019-08-09), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-04), 10-K (filing date: 2016-08-05), 10-K (filing date: 2015-08-07).

Item Description The company
FCFE Free cash flow to equity is the cash flow available to Automatic Data Processing Inc.’s equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made. Automatic Data Processing Inc.’s FCFE increased from 2018 to 2019 but then slightly decreased from 2019 to 2020 not reaching 2018 level.

Price to FCFE Ratio, Current

Automatic Data Processing Inc., current P/FCFE calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
No. shares of common stock outstanding 428,813,999
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in thousands) 2,159,200 
FCFE per share 5.04
Current share price (P) 174.08
Valuation Ratio
P/FCFE 34.57
Benchmarks
P/FCFE, Competitors1
Accenture PLC 20.78
Waste Management Inc. 9.87
P/FCFE, Sector
Support Services 20.95
P/FCFE, Industry
Industrials 23.13

Based on: 10-K (filing date: 2020-08-05).

1 Click competitor name to see calculations.

If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.


Price to FCFE Ratio, Historical

Automatic Data Processing Inc., historical P/FCFE calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
No. shares of common stock outstanding1 429,965,405 433,942,837 438,082,756 444,374,752 456,176,951 465,810,128
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in thousands)2 2,159,200  2,381,700  2,037,100  1,653,300  3,470,700  (605,200)
FCFE per share3 5.02 5.49 4.65 3.72 7.61 -1.30
Share price1, 4 134.77 167.73 134.25 111.39 89.67 80.29
Valuation Ratio
P/FCFE5 26.84 30.56 28.87 29.94 11.79
Benchmarks
P/FCFE, Competitors6
Accenture PLC 19.01 19.50 18.11 20.24 18.22 18.79
Waste Management Inc. 10.30 19.13 28.12 15.70 87.10
P/FCFE, Sector
Support Services 17.97 20.62 23.79 15.35 38.96
P/FCFE, Industry
Industrials 21.97 20.95 18.54 72.94 42.12

Based on: 10-K (filing date: 2020-08-05), 10-K (filing date: 2019-08-09), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-04), 10-K (filing date: 2016-08-05), 10-K (filing date: 2015-08-07).

1 Data adjusted for splits and stock dividends.

2 See details »

3 2020 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 2,159,200,000 ÷ 429,965,405 = 5.02

4 Closing price as at the filing date of Automatic Data Processing Inc.’s Annual Report.

5 2020 Calculation
P/FCFE = Share price ÷ FCFE per share
= 134.77 ÷ 5.02 = 26.84

6 Click competitor name to see calculations.

Valuation ratio Description The company
P/FCFE Price to free cash flow to equity is cash valuation indicator of stockholders’ equity. Automatic Data Processing Inc.’s P/FCFE ratio increased from 2018 to 2019 but then decreased significantly from 2019 to 2020.