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How to buy Automatic Data Processing shares (ADP)

Automatic Data Processing provides cloud-based human resources software and has worked in HR for more than 70 years. This page takes you through the company and how to buy shares in ADP.

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Updated: Jul 6, 2023

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In this guide we cover all the basic information that you need to know in order to invest in ADP. Learn about the company’s history, its recent stock market performance, and then follow our step-by-step guide to buy your first share.

Compare the best Automatic Data Processing trading platforms

In order to invest your money in the stock market you need to create an account with an online broker. You can use any of the brokers below to get started, and clicking the links in the table will take you to their website where you can sign up in just a few minutes.

How to buy Automatic Data Processing stock, a step-by-step guide

The process of getting shares in Automatic Data Processing isn’t massively complicated, so don’t worry even if you’re new to stock investing. These are the steps to follow in order to complete your investment:

Choose a broker. You will need to use an online brokerage platform. There are many different options to choose from, each with their own unique benefits and drawbacks. The comparison table above can help you select the right broker for you, and you can head to our comprehensive broker reviews if you’re still unsure.
Create an account. Once you’ve selected your broker, simply go to their website and create an account. The steps required for this will vary from platform to platform, but generally you can expect to have to provide your name, email address, phone number, and some form of photo identification.
Deposit funds. Log into your broker account and select the option to deposit funds. Depending on your broker you’ll have a variety of payment options available; most brokers accept bank transfers and debit card payments, but not all accept e-wallets such as PayPal. Select your preferred payment method and deposit the amount of money you wish to invest in Automatic Data Processing shares.
Place an order for ADP stock. Search for Automatic Data Processing’s ticker symbol (ADP) and see the current price at which the stock is trading. If you’re happy with the price, enter the amount of shares you wish to own and place your order.
Execute your order. Once you have placed your order, your broker will automatically execute it for you and your Automatic Data Processing shares will be listed in your account. Congratulations, you’ve just bought shares in Automatic Data Processing.

Should I invest in Automatic Data Processing?

Automatic Data Processing is a good company with a strong track record that would be a reliable addition to any portfolio. It’s especially well-suited to anyone who wants to put their money in a low-risk investment that pays a dividend every year.

ADP offers human resources software to help companies manage their employees and payroll. As you might have noticed, that’s not a very exciting business, but it certainly is a good one. It generates a reliable stream of income from subscriptions and is able to return money to shareholders on a regular basis.

The main way it does so is through dividends. ADP is a member of the Dividend Aristocrats Club, which means it has raised its dividend for at least 25 consecutive years. In ADP’s case, it’s actually 46 years in total. That makes it a source of income you can rely on, whatever the economic situation.

How has the company performed in recent years?

ADP has steadily improved its position over the last decade, just as it has done for most of its history. The stock price has been on the up virtually non-stop since 2008. Even if the growth hasn’t been sensational, it has been consistent and there have been very few dramatic changes.

All of that is good news for an investor who’s looking for a safe store of value. As is the fact that ADP has continually increased its revenue and net income over the last few years. Net income in particular looks rosy, as the company reported a 20% increase in 2019, 7% in 2020, and 5% again in 2021.

Those numbers show how the company was able to weather the pandemic, but it didn’t escape completely unscathed. The number of new customers dropped by 20% in 2020, perhaps not surprisingly given the level of unemployment in the US in particular. It didn’t take long for those numbers to recover though, and 2021 saw a big increase in new bookings.

Is it a good time to buy Automatic Data Processing shares now?

It depends on what your goals are. If you’re looking for a safe stock, or you’re interested in dividend stocks, then ADP is an excellent option at any time. It’s particularly suited to someone who might be saving for retirement, or wants to invest in a few reliable companies to balance out riskier purchases elsewhere.

There are no obvious signs that anything would change for ADP in the near future. The fact that so much of its revenue comes from subscriptions means that its balance sheet is secure, while it has proven adept at keeping clients on board once they sign up. That’s a very good sign as to the quality of its business.

If there are any risks to that model, they might come from new or unforeseen technology, or new companies that enter the space. Follow the latest news in the links below to keep up to date with every development that might affect ADP.

Buying, selling and trading Automatic Data Processing shares for beginners

What to do before buying shares

You should always take the time to research a stock fully before investing your money, especially if you haven’t bought shares before. The more knowledge you have, the better your chances of making a wise investment.

With that in mind, here’s a checklist to run through before you start.

Research the company. You should always examine the fundamentals of a company first. What is Automatic Data Processing? How did the company get its start? How did it grow? Is Automatic Data Processing’s revenue and profit growth picking up? Is the company innovating? The more you know about Automatic Data Processing, the better positioned you’ll be to make smart investment decisions.
Make sure you understand the basics of stock investing. Before getting involved in the stock market, make sure you have an understanding of how it works. This will ensure that you have more clearly defined goals and have thought through how you will achieve them.
Decide between share dealing and CFD trading. Choose the type of investment strategy you want to pursue, and make sure you have carried out the necessary fundamental or technical analysis for share dealing and CFD trading respectively.
Set the size of your budget. The golden rule of investing is never to risk more than you can afford to lose. Not every investment you make will result in a profit, so it is important to set a budget that not only allows good potential for capital growth, but also protects against overly damaging losses.
Find the right broker. Individual brokers each have their own pros and cons. Some will have low fees but have a user interface you struggle to understand, whereas others may be a bit more expensive but come with a range of features that you want to take advantage of.
Examine broader market conditions. No stock exists in a vacuum, and it’s always important to analyse the general trends of the stock market as a whole before investing. If a bear market is setting in and stock prices are falling, it’s best to wait it out and invest your money later when the stock is cheaper. If, however, the market is looking bullish, you’ll want to make your investment quickly to get the maximum benefit from rising stock prices.

What is the difference between buying, selling, and trading shares?

If you’re new to stock investing, then it’s important to understand the basics of how to buy, sell, and trade Automatic Data Processing shares. Here’s a quick run-through of what’s involved in each.

Buying Automatic Data Processing

This process involves finding a broker and placing an order for Automatic Data Processing stock, as outlined in the steps further up this page. Ideally you want to time your investment when the stock’s price is low so that you can profit by selling the shares after they increase in value.

Selling Automatic Data Processing

When you sell any Automatic Data Processing shares you have bought, you’ll want to do so at a higher price than the one at which you bought to earn a profit.

When you sell is up to you. You might decide to hold for a long period of time, hoping to benefit from the company growing steadily throughout. Or, if you see that Automatic Data Processing’s stock is already up a lot compared to the price you bought it and you’ve noticed that the stock market is starting to fall, it might make sense to sell and take your profits to invest elsewhere. Equally, if the stock has fallen since you bought it and looks set to fall further, it might be a good idea to cut your losses by selling your shares.

Trading Automatic Data Processing

Trading is the same process, it’s just done over shorter periods of time with the aim to make small profits on a regular basis. This means that you can make money faster and spend your profits in your day-to-day life – however, on the other side it means you can lose money faster as well. For inexperienced investors, we generally recommend making investments for at least 6 months to a year instead of making trades in quick succession.

You can trade Automatic Data Processing shares through buying and selling shares, or by trading with CFDs. These allow investors to speculate on stock prices and trade with leverage in pursuit of bigger gains. CFDs trading is explained further in the next section, but it is worth noting that beginners should avoid trading with leverage. It comes with large risks and is best left to experienced investors.

When it comes to investing in any stock, the two options you have are share dealing and trading. Which one of these methods to opt for largely depends on your investment timeline, with investors thinking long term tending to go for share dealing, and those looking for short term gains pursuing a more aggressive trading strategy.

Here’s a quick summary of the two approaches, and the pros and cons of each.

Share dealing refers to the practice of buying and holding shares in a particular company over the long term. When investing like this, you’re seeking to profit either from dividend payments or an increase in the stock’s price over time.

When investing your money this way, it is important to do thorough fundamental analysis of the company in which you are investing. You want to put your money in a stock you believe will trend upwards over time, even if there is some market volatility along the way, rather than get distracted by shorter term peaks and troughs.

Pros

Can build wealth over time to achieve financial goals
Don’t need to be very reactive to short-term market movements
Some stocks will give you an income through regular dividend payments

Cons

Takes a long time to realise any profits
Your capital is tied up in stocks and cannot be used for other investments

CFD Trading

If your aim is to generate profits in the short term, then you might be better off trading shares than holding them in your portfolio. Stock trades like this are executed using CFDs (contracts for difference), which allow investors to trade against the value of a stock without having to take ownership of it. When CFD trading, investors are looking to buy and sell stocks fast to profit from short-term fluctuations in value.

One aspect of CFD trading that many investors find attractive is that they allow you to trade with leverage. This means you can place large trades while only putting up a fraction of the value yourself – for instance, if a platform offered leverage of 1:10, you could put £10 into ADP shares and be able to trade £100 worth. This can maximise profits if the market moves in your favour, but be careful as it can also lead to heavy losses.

When trading using CFDs, it is key to be skilled at technical analysis and reading stock price charts. As you’re trading stocks quickly and frequently, the fundamental strength of the company in which you’re investing isn’t as important as being able to predict how its stock price will rise and fall minute-by-minute.

Pros

Can generate fast profits if you read the market right
Some platforms allow you to trade with leverage
Prevents your capital being tied up so you can take advantage of investment opportunities

Cons

Trading with leverage is risky and can lead to big losses
Doesn’t necessarily generate growth over the long term

Consider which approach suits you best and craft an investment strategy that works for you. If you need more advice or information, we have courses that look at both short term trading and long term investing in more detail.

How to choose a broker

With the wide variety of online brokers available these days, it can be hard to figure out which is the best service to go with. Our comparison table and in-depth reviews can help you cut through the noise, but by and large these are the aspects you should be considering when selecting a broker:

Range of stocks available. The most important thing is that you can actually use the broker to find the shares you’re looking for. Some brokers offer more stocks than others, and many will allow you to trade other assets, such as forex and cryptocurrencies.
Fees and commissions. You want to keep as large a chunk of your profits as you can, so it’s important to make sure your broker doesn’t charge high fees that can eat into your profits.
Regulation. You should only use regulated brokers. Unregulated brokers can be risky and offer little to no protection if the business were to fail while you had funds in your account.
Payment methods available. You might want to fund your trading account using a specific payment method, such as PayPal. Not all brokers accept every payment method, but using our comparisons you can search only the brokers that support the option you’re looking for.
Reputation. One of the strongest indicators of a broker’s reliability is the reputation it has with the customers who have used it. Brokers are online businesses, and as such many user experiences can be found online. You can check these out in addition to our reviews to make sure you choose the right platform.
Customer service. As you’re going to be investing your money using the platform, you want to check that the broker offers good customer service in case you have a query or something goes wrong.

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James Knight

Editor of Education

James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the... read more.