10 Best Dividend Growth Stocks to Buy and Hold Now

3. Automatic Data Processing, Inc. (NASDAQ:ADP)

5-Year Annual Dividend Growth Rate: 12.2%

Automatic Data Processing, Inc. (NASDAQ:ADP) is a New Jersey-based management services company that offers a wide range of services, including payroll processing, tax administration, and human capital management. The company is a leading player in the payroll and human capital management software industries. This diverse presence ensures that the company is not dependent on the success of any single customer, industry, or company.

Automatic Data Processing, Inc. (NASDAQ:ADP) reported strong fiscal Q3 2024 earnings due to healthy new business bookings and high client retention. Its commitment to delivering innovative products, differentiated services, and exceptional experiences has led to record-high client satisfaction this fiscal year. With a stable demand for human capital management (HCM), the company is focused on executing successfully in the upcoming quarters and building momentum in fiscal 2025.

Automatic Data Processing, Inc. (NASDAQ:ADP) reported revenue of nearly $5.3 billion in fiscal Q3 2024, up from $4.9 billion during the same period last year. The company’s net earnings for the quarter also jumped to $1.2 billion, from $1 billion in the prior-year period. As a dividend company, it has carefully managed its cash flow, enabling it to consistently increase its payouts year after year. In the most recent quarter, the company generated nearly $3 billion in operating cash flow.

Automatic Data Processing, Inc. (NASDAQ:ADP) currently offers a quarterly dividend of $1.40 per share and it supports a dividend yield of 2.39%, as of July 2. It is one of the best dividend aristocrat stocks on our list as the company has been raising its payouts for 49 consecutive years. Moreover, its 5-year average annual dividend growth rate is over 12%.

According to Insider Monkey’s database, 52 hedge funds in Insider Monkey’s database owned stakes in Automatic Data Processing, Inc. (NASDAQ:ADP), compared with 54 in the previous quarter. The total value of these stakes is over $3.8 billion. Citadel Investment Group remained bullish on the stock during the quarter, boosting its position in the company by 787%.