8 Magnificent Dividend Growth Stocks to Buy Now

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

5-Year Average Annual Dividend Growth Rate: 12.12%

Automatic Data Processing, Inc. (NASDAQ:ADP) is a New Jersey-based management services company that offers payroll processing, tax administration, and human capital management services to its consumers. The company’s dominance in HCM technology plays a crucial role in its success, highlighting its ongoing commitment to innovation and strategic acquisitions. A key move in this regard was its recent acquisition of WorkForce Software. This strategic acquisition strengthens ADP’s offerings, enabling the company to provide a broader range of large-scale workforce management solutions worldwide. The stock has surged by over 29% year-to-date.

In fiscal Q1 2025, Automatic Data Processing, Inc. (NASDAQ:ADP) reported strong earnings, with its revenue coming in at $4.8 billion, up 7% from the same period last year. The company’s revenue and margin performance in the first quarter also surpassed expectations, driven by robust growth in new business bookings, strong client revenue retention, and increased interest revenue from client funds.

Automatic Data Processing, Inc. (NASDAQ:ADP) had a strong cash position. The company ended the quarter with over $2.1 billion available in cash and cash equivalents and its total assets amounted to more than $49.5 billion. Its operating cash flow jumped to $824.4 million in Q1, from $326.5 million in the prior-year period. In addition, it trailing twelve month levered free cash flow amounted to $2.6 billion.

On November 6, Automatic Data Processing, Inc. (NASDAQ:ADP) announced a 10% hike in its quarterly dividend to $1.54 per share. Through this increase, the company achieved its Dividend King status, having raised its payouts for 50 years in a row. Moreover, in the past five years, the company has raised its payouts at an annual average rate of over 12%. The stock’s dividend yield on November 14 came in at 2.04%.