Munger Mode rating: 4 out of 5 — Buy. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
We have spent our lives looking for businesses that collect money from customers who cannot easily leave, hold other people's cash interest-free along the way, and require almost no capital to grow. ADP is one of the purest examples of that species listed on an American exchange. It pays one in six American workers, holds roughly $40 billion of client payroll float on an average day, retains its core clients for about thirteen years, and has raised its dividend for 51 consecutive years — a streak that began when one of us still had dark hair. The business is wonderful. The question, as always, is price. At $270 the stock trades at roughly 22 times next year's earnings — a fair price for a franchise of this quality, but no longer the bargain it was this spring, when a nervous market let it go for about $196 and 19 times trailing earnings.
Recent filings analysed: 10-K (2026-08-05), 8-K (2026-07-29), 8-K (2026-06-26), 8-K (2026-05-07).
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