Core Viewpoint - Companies that consistently raise dividends can lead to significant wealth accumulation over time, emphasizing the importance of patience and consistency in stock selection [1][2]. Group 1: Dividend Growth Stocks - Dividend growth stocks have historically outperformed other stock types over the long term, making them a valuable addition to a diversified portfolio [2]. - Five blue-chip dividend stocks with a strong track record of consistent dividend growth are highlighted as potential wealth-building investments [2]. Group 2: Microsoft - Microsoft has raised its dividend for 23 consecutive years, showcasing its commitment to returning value to shareholders while investing in innovation [3][4]. - The company has a market capitalization of $3,849 billion and a current price of $517.81, with a dividend yield of 0.01% [5]. Group 3: McDonald's - McDonald's has raised its dividend for 49 consecutive years, benefiting from a global presence with over 44,000 locations [6][7]. - The company generates steady revenue from royalties and fees, positioning it for continued growth amid a rising global population [7]. Group 4: Automatic Data Processing (ADP) - ADP has a 50-year streak of dividend growth, indicating strong management capable of navigating market challenges [8][9]. - The company has a market capitalization of $105 billion and a current price of $260.30, with a dividend yield of 0.02% [9]. Group 5: Sherwin-Williams - Sherwin-Williams has raised its dividend for 46 consecutive years, with a modest payout ratio of 28% of 2025 earnings estimates [10][11]. - The company is positioned to benefit from ongoing demand for paint and coatings, ensuring its relevance in the market [11]. Group 6: Walmart - Walmart has over five decades of uninterrupted annual dividend increases, with a current market capitalization of $807 billion and a price of $101.25 [12][13][14]. - The company maintains a dividend payout ratio below 40% of 2025 earnings estimates, reinforcing its status as a reliable dividend stock [14].

Financial Data and Key Metrics Changes - The company reported a 7% revenue growth and a 7% adjusted EPS growth for Q1 2026 [4][14] - Employer Services segment revenue increased by 7% on a reported basis and 5% on an organic constant currency basis [14][15] - Client funds interest revenue increased more than anticipated, leading to an increase in the full-year forecast by $10 million to a range of $1.30 to $1.32 billion [16][18] Business Line Data and Key Metrics Changes - Employer Services new business bookings showed solid growth, resulting in record sales volume for a first quarter [4][5] - PEO revenue growth of 7% exceeded expectations, driven by growth in zero margin pass-throughs and higher wages [5][17] - Employer Services pays per control growth rounded down to 0% for the first quarter, reflecting client caution in adding headcount [5][15] Market Data and Key Metrics Changes - Overall client satisfaction score reached a new all-time high for a first quarter, indicating improvements across business units [5] - The company experienced specific strength in ADP® Lyric HCM, with new business bookings exceeding expectations [8][9] - International markets showed a bit of softness in Q1, attributed to the lumpy nature of large, complex deals [87] Company Strategy and Development Direction - The company is focused on leading with best-in-class HCM technology, including the deployment of ADP Workforce Now® NextGen [7][10] - The acquisition of Pequody aims to enhance capabilities in compensation management, supporting complex planning needs [10][78] - AI initiatives are being advanced to improve client engagement and operational efficiency, with a focus on generative AI [11][12] Management's Comments on Operating Environment and Future Outlook - Management described the HCM demand backdrop as relatively stable, with no significant changes observed in deal cycles [23][24] - The company maintains its full-year growth guidance for Employer Services at 4% to 7% and PEO revenue growth at 5% to 7% [15][17] - Management expressed confidence in achieving the fiscal 2026 consolidated revenue outlook of 5% to 6% growth [18] Other Important Information - The company announced the acquisition of Pequody, which will broaden its capabilities in compensation management [10][78] - The company is committed to expanding its global capabilities, having recently gone live with its first GlobalView client in Costa Rica [13] Q&A Session Summary Question: Update on deal cycles and time to close - Management indicated that the HCM demand backdrop remains stable, with no meaningful changes in deal cycles observed in Q1 [23][24] Question: Confidence in Employer Services guidance amid slight downticks - Management expressed confidence in the guidance, noting that movements are relatively small and offsetting each other [25][27] Question: Surprising areas of new bookings growth - Management highlighted growth in small business services, particularly in retirement services and insurance, as well as continued interest in ADP® Lyric HCM [34] Question: Performance of the PEO and participation rates - Management reported the highest participation rates in four years during the recent enrollment period, indicating strong demand for health benefits [71] Question: Impact of recent layoffs in the market - Management stated that the hiring situation is static, with reduced layoff levels, and these factors are contemplated in their guidance [120]

Group 1: Economic Indicators - The upcoming nonfarm payroll report is considered the most significant economic indicator, with potential implications for Federal Reserve rate decisions [5] - Concerns exist regarding overheating in certain sectors of the economy, particularly data centers, while other sectors like autos, homes, and retailers are performing poorly [2] Group 2: Company Earnings Reports - Carnival and Jefferies are set to report quarterly earnings, with Carnival's performance in the cruise industry being highlighted as strong post-COVID, and Jefferies' performance indicating the health of investment houses [2] - Paychex is viewed as a solid metric for the economy's state, with its earnings report expected to provide insights into small and medium-sized businesses [3] - Nike's earnings report is anticipated to be crucial, with expectations for future growth under new CEO Elliot Hill, although uncertainty remains about whether the upcoming report will be a breakout quarter [3] - Conagra's earnings report is awaited, with concerns about its high dividend and the need for a significant positive surprise to reverse its stock's downward trend [4]

Stock Focus - Jim Cramer is closely monitoring Paychex shares [1]

Financial Data and Key Metrics Changes - The company reported a solid third quarter with 6% revenue growth, 10 basis points of adjusted EBIT margin expansion, and 6% adjusted EPS growth [9][19] - Employer Services (ES) segment revenue increased by 5% on a reported and organic constant currency basis [19][21] - PEO revenue growth was 7%, exceeding expectations, supported by higher wages and strong retention [21][22] Business Line Data and Key Metrics Changes - New business bookings for Employer Services showed solid growth, particularly in U.S. offerings, while international bookings experienced softness due to macroeconomic uncertainty [10][11] - PEO revenue excluding zero margin pass-through growth was 8%, with average worksite employee growth at 2% [22] - The integration of Workforce Software is progressing well, with strong interest in time and attendance solutions [13][55] Market Data and Key Metrics Changes - The company experienced a decline in international bookings, attributed to macroeconomic uncertainty, but maintains a strong pipeline for future growth [11][30] - U.S. clients continued to hire, with pays per control growth remaining at 1% [11][20] - The company anticipates a continued focus on growth in the Latin America region following the acquisition of PEI in Mexico [14][66] Company Strategy and Development Direction - The company is focused on leading with best-in-class HCM technology and providing unmatched expertise in outsourcing [12][17] - The partnership with Fiserv is expected to enhance distribution and accelerate sales through integrated solutions [15][34] - The company aims to maintain strong client satisfaction and retention levels while investing in products and people for sustainable growth [25][73] Management's Comments on Operating Environment and Future Outlook - Management noted that while there is macroeconomic uncertainty, the underlying economic factors remain strong, with low unemployment and continued hiring [42][44] - The company expects pays per control growth to remain below normal levels in fiscal 2026 due to economic conditions [24][25] - Management remains optimistic about the strength of the pipeline and the potential for growth in the fourth quarter [30][102] Other Important Information - A CFO transition was announced, with Peter Hadley set to succeed Don McGuire effective July 1 [6][8] - The company received several awards for its HCM technology, indicating strong market recognition [17] Q&A Session Summary Question: Can you provide more color on the softer international bookings? - Management indicated that the softness is due to macroeconomic uncertainty, but strong pipelines remain for future growth [30] Question: What is the growth opportunity for the embedded offering with Fiserv? - Management expressed excitement about the partnership, highlighting the potential for significant growth through integrated solutions [34] Question: How is the company addressing client hesitancy in the current macro environment? - Management noted stability in their client base, with continued hiring and strong pipelines, despite some apprehension regarding large deals [42][44] Question: What are the expectations for PEO business in the current environment? - Management reported solid growth in PEO bookings and strong retention, indicating a positive outlook for the segment [51][52] Question: How does the company view its hiring plans in light of current conditions? - Management confirmed no changes to hiring plans, maintaining optimism about business performance [85] Question: What percentage of bookings come from international markets? - Management stated that approximately 12% of revenue comes from international markets, with the majority being domestic [113] Question: How does the company plan to manage margins going forward? - Management indicated that while some margin pressures exist, they expect to recover some costs through integration and operational efficiencies [114]