Core Insights - Lowe's has a target payout ratio of 35% and currently operates at approximately 38%, indicating potential for dividend growth aligned with net income increases [1][2] - The company has significantly outpaced inflation with its dividend growth, having more than quintupled the inflation rate since the pandemic [2] - Lowe's has maintained a streak of over 60 consecutive years of dividend increases, earning it the status of both Dividend Aristocrat and Dividend King [3][4] Dividend Growth and Strategy - Lowe's dividend growth has doubled since 2021, with a 4% increase planned for 2025, which still exceeds inflation [2][3] - The company has made strategic acquisitions, spending over $10 billion on Artisan Design Group and Foundation Building Materials to enhance its market position and product offerings [6] - Analysts project an 8% growth for Lowe's in the coming year, although they have historically underestimated the company's earnings growth [6] Market Position and Comparisons - Lowe's is part of a select group of companies known as Dividend Aristocrats, with fewer than 70 companies achieving this status [4][5] - The article highlights other companies with strong dividend growth, such as A. O. Smith and Automatic Data Processing, which also have impressive long-term dividend increase records [5][13] - A. O. Smith has increased its dividends by 1,600% since 2000, while Automatic Data Processing has raised its payouts by 2,100% in the same period [8][13] Financial Metrics - Lowe's current market capitalization is approximately $136 billion [3] - A. O. Smith has a payout ratio of 37%, lower than Lowe's, indicating potential for future dividend growth [8] - Automatic Data Processing has a higher payout ratio of 60%, but it has maintained a strong earnings growth rate of 9.8% [14]

Core Insights - The article emphasizes the effectiveness of investing in dividend growth stocks and reinvesting dividends as a strategy for long-term wealth growth [1] Group 1: Investment Strategy - The individual investor has explored various investment styles over 25 years, concluding that dividend growth stocks are particularly beneficial for wealth accumulation [1] - The investor operates a blog focused on S&P Dividend Aristocrats and other dividend growth stocks, indicating a commitment to sharing knowledge in this area [1] Group 2: Investment Vehicles - The investor has experience with a range of investment vehicles, including stocks, options, ETFs, treasury notes, and mutual funds, showcasing a diverse investment background [1]

Core Insights - The "High Income DIY Portfolios" Marketplace service aims to provide high income with low risk and capital preservation for DIY investors, particularly targeting income investors such as retirees or near-retirees [1][2] - The service offers seven portfolios, including three buy-and-hold, three rotational portfolios, and a conservative NPP strategy portfolio, designed to generate stable, long-term passive income with sustainable yields [1][2] Portfolio Details - The portfolios include two High-Income portfolios, two Dividend Growth Investing (DGI) portfolios, and a conservative NPP strategy portfolio characterized by low drawdowns and high growth potential [1] - The service encompasses a total of 10 model portfolios with varying income targets and risk levels, along with buy and sell alerts and live chat support for investors [2]

Financial Performance - Total revenues for the three months ended September 30, 2025, increased by 7% to $5,175.2 million, with 6% growth on an organic constant currency basis[88]. - Adjusted diluted earnings per share grew by 7% to $2.49, driven by a reduction in shares outstanding due to share repurchases[103]. - Net earnings for the three months ended September 30, 2025, were $1,013.0 million, reflecting a 6% increase from $956.3 million in 2024[120]. - EBIT for the three months ended September 30, 2025, was $1,307.5 million, reflecting a 6% increase year-over-year[98]. - Adjusted EBIT increased to $1,318.3 million, a 7% rise from $1,232.5 million in the previous year, with an adjusted EBIT margin of 25.5%[120]. Revenue Breakdown - Employer Services revenue increased by 7% to $3,491.2 million, while PEO Services revenue also grew by 7% to $1,687.5 million[106]. - Employer Services revenue increased to $1,228.8 million for the three months ended September 30, 2025, up 6% from $1,164.3 million in 2024[108]. - PEO Services revenue rose to $1,687.5 million, a 7% increase from $1,574.5 million in the prior year, driven by a 2% increase in average worksite employees[112]. Expenses and Margins - Total expenses for the three months ended September 30, 2025, rose by 8% to $3,977.8 million, primarily due to increased operating expenses and selling, general, and administrative expenses[91]. - Employer Services margin decreased by 50 basis points to 35.2% due to increased selling and marketing expenses[111]. - PEO Services margin decreased by 140 basis points to 13.0% due to higher operating costs related to state unemployment insurance[114]. Shareholder Returns - Cash returned to shareholders amounted to $1.0 billion, including $0.6 billion in dividends and $0.4 billion in share repurchases[89]. - The company repurchased approximately 1.2 million shares at an average price of $302.10 during the quarter, compared to 1.4 million shares at $259.47 in the same period last year[131]. Cash Flow and Liquidity - Operating cash flows decreased to $642.3 million, down from $824.4 million in the prior year, primarily due to unfavorable changes in operating assets and liabilities[128]. - Net cash flows provided by operating activities decreased by $182.1 million to $642.3 million for the three months ended September 30, 2025, compared to $824.4 million in 2024[128]. - The company has $10.6 billion in committed credit facilities and sufficient liquidity to meet operational needs[126]. Investments and Capital Expenditures - Capital expenditures for the three months ended September 30, 2025, were $44.9 million, down from $55.6 million in the same period in 2024, with expected capital expenditures for fiscal 2026 between $225 million and $250 million[136]. - Average investment balances at cost for corporate investments were $11.39 billion and for funds held for clients were $34.93 billion for the three months ended September 30, 2025[143]. - The total available-for-sale securities at fair value amounted to $35.65 billion as of September 30, 2025, with net unrealized pre-tax losses of $211.5 million[143]. Interest and Debt Management - Interest on funds held for clients increased to $286.8 million, up from $253.3 million, due to a 6.5% rise in average client funds balances[89][90]. - The company maintains a strategy to average through an interest rate cycle by laddering the maturities of investments out to five years for the extended portfolio and ten years for the long portfolio[140]. - The company has $4.0 billion of senior unsecured notes maturing in 2028, 2030, 2032, and 2034, and may revisit the long-term debt market for refinancing and growth investments[132].

Core Insights - Automatic Data Processing (ADP) reported its earnings this week, marking a significant event in the earnings season [1] Company Analysis - ADP has not been covered in over a year, indicating a potential shift in focus or interest in the company's performance [1] - The company is part of a broader investment strategy that includes high-quality dividend stocks, Business Development Companies, REITs, and Closed End Funds, suggesting a diversified approach to investment income [1] Investment Strategy - The investment strategy discussed emphasizes a hybrid system that balances growth and income, aiming to achieve total returns comparable to traditional index funds like the S&P [1]

Core Viewpoint - Automatic Data Processing Inc. (ADP) is a leading company in the human resources and payroll services industry, reporting strong fiscal first-quarter results despite a stock decline [1][2][3]. Financial Performance - ADP reported quarterly revenues of $5.18 billion, exceeding the analyst consensus estimate of $5.14 billion, representing a 7% year-over-year increase [2][6]. - The company's adjusted earnings per share (EPS) were $2.49, surpassing the expected $2.44, while adjusted earnings before interest and taxes (EBIT) rose by 7% to $1.3 billion, maintaining an adjusted EBIT margin of 25.5% [3][6]. - Net earnings increased by 6% year-over-year to $1.01 billion, indicating strong financial performance [3]. Market Position - ADP's market capitalization is approximately $106.65 billion, with a trading volume of 1,047,374 shares on the NASDAQ exchange [5]. - The stock price is currently around $263.28, showing a slight increase of approximately 0.79% or $2.06, with fluctuations between a low of $260.22 and a high of $265.92 during the trading day [4][5]. - Over the past year, the stock has reached a high of $329.93 and a low of $260.22, reflecting some volatility in the market [5]. Cash Position - As of September 30, ADP held $7.94 billion in cash and equivalents, indicating a robust financial position that suggests potential for future growth [4][6].

Core Insights - Automatic Data Processing, Inc. (ADP) is recognized as one of the 13 most undervalued dividend stocks according to Wall Street analysts [1] - ADP has acquired Pequity, a compensation management software firm, to enhance its capabilities in compensation management [3] Group 1: Acquisition Details - On October 29, ADP announced the acquisition of Pequity, which was established in 2019, aimed at improving tools for complex compensation planning for mid-sized, enterprise, and multinational clients [3] - Sreeni Kutam, president of Global Product and Innovation at ADP, emphasized the need for flexible compensation solutions due to changing pay transparency laws and the dynamic talent market [3] Group 2: Financial Performance - ADP has a strong track record of consistent dividend growth, having increased its payouts for 50 consecutive years [3] - The company currently offers a quarterly dividend of $1.54 per share, resulting in a dividend yield of 2.36% as of October 29 [3]

Core Insights - Automatic Data Processing Inc. (ADP) reported fiscal first-quarter 2026 results that surpassed Wall Street expectations, yet shares declined over 5% during intra-day trading [1] Financial Performance - Adjusted earnings per share were $2.49, exceeding the analyst estimate of $2.44 [2] - Revenue increased by 7% year-over-year to $5.2 billion, surpassing the consensus forecast of $5.14 billion [2] - Net earnings rose by 6% to $1.0 billion, while adjusted EBIT increased by 7% to $1.3 billion, maintaining margins at 25.5% [2] Segment Performance - Employer Services revenue grew by 7% to $3.49 billion [3] - PEO Services revenue also saw a 7% increase to $1.69 billion [3] - The average number of worksite employees paid through PEO Services rose by 2% to approximately 754,000 [3] - Interest on funds held for clients increased by 13% to $287 million, supported by a 7% rise in average client fund balances to $34.9 billion [3] Future Outlook - ADP reaffirmed its fiscal 2026 outlook, projecting revenue growth of 5% to 6% [4] - Expected adjusted EBIT margin expansion of 50 to 70 basis points [4] - Anticipated adjusted EPS growth of 8% to 10% [4]

ADP delivered a strong FY 2026 Q1 earnings beat, but investors responded with caution. ...

Core Insights - Automatic Data Processing (ADP) reported a revenue of $5.18 billion for the quarter ended September 2025, reflecting a year-over-year increase of 7.1% [1] - Earnings per share (EPS) for the quarter was $2.49, up from $2.33 in the same quarter last year, exceeding the consensus estimate of $2.44 [1] Financial Performance - The reported revenue of $5.18 billion surpassed the Zacks Consensus Estimate of $5.13 billion, resulting in a surprise of +0.95% [1] - EPS also exceeded expectations with a surprise of +2.05% compared to the consensus estimate [1] - Average paid PEO worksite employees during the period was 754, slightly below the two-analyst average estimate of 757 [4] Segment Revenue Breakdown - Employer Services revenue was $3.49 billion, exceeding the average estimate of $3.45 billion, marking a +7.1% change year-over-year [4] - Interest on funds held for clients generated $286.8 million, surpassing the average estimate of $281.99 million, with a year-over-year increase of +13.2% [4] - Other revenues, excluding interest and PEO revenues, totaled $3.2 billion, exceeding the three-analyst average estimate of $3.17 billion, representing a +6.5% change year-over-year [4] - PEO revenues reached $1.68 billion, slightly above the average estimate of $1.67 billion, with a +7.2% year-over-year change [4] - PEO Services revenue was $1.69 billion, also exceeding the average estimate of $1.68 billion, reflecting a +7.2% change year-over-year [4] - Other segment revenues reported a loss of $-3.5 million, which was worse than the estimated loss of $-3.05 million, but showed a significant year-over-year improvement of +25% [4] Stock Performance - ADP shares have returned -4.7% over the past month, contrasting with the Zacks S&P 500 composite's +3.8% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]