Automatic Data Processing (ADP) Stock Could Trade At A 17% Premium On Cash Flow

Automatic Data Processing has delivered a solid run over the past several years, which now puts a spotlight on whether the current share price lines up with the cash the business is expected to generate. With the stock recently closing at US$294.50, the key question is how that price compares with what its future cash flows can reasonably support. Over the past 5 years, Automatic Data Processing has returned 48.4%, which makes the valuation question more about sustaining that track record in...