10 Magnificent Dividend Growth Stocks to Invest In

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

5-Year Average Dividend Growth Rate: 11.84%

Automatic Data Processing, Inc. (NASDAQ:ADP) is an American management services company that offers payroll processing, tax administration, and human capital management services to its consumers. The company provides these services by utilizing cloud-based software to streamline workforce operations and allow businesses to focus on growth. In the second quarter of fiscal 2025, revenue increased by 8% year-over-year, reaching $5.05 billion. Looking ahead, the company expects full-year revenue growth of 6% to 7% and anticipates expanding its adjusted EBIT margin by 30 to 50 basis points.

With operations in 140 countries, Automatic Data Processing, Inc. (NASDAQ:ADP) manages payroll for approximately one in six U.S. workers, supporting a global workforce of 16 million employees. Its extensive client base has solidified ADP’s position as an industry leader, providing not only efficient payroll solutions but also valuable economic insights derived from workforce data. These insights, including wage benchmarks, help businesses stay competitive, adding further value to the company’s services. In the past 12 months, the stock has surged by nearly 26%.

Automatic Data Processing, Inc. (NASDAQ:ADP) maintains a strong financial position with substantial cash reserves, closing the quarter with over $2.2 billion in cash and cash equivalents. During the first half of the fiscal year, operating cash flow reached nearly $2 billion, an increase from $1.35 billion in the same period the previous year. With a track record of 50 consecutive years of dividend growth, ADP is one of the best dividend aristocrat stocks on our list. The company pays a quarterly dividend of $1.54 per share and has a dividend yield of 2.01%, as of March 9.