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Mr. Potter From "It's a Wonderful Life" Would Hate This Tech Stock
I was home alone last weekend (no jokes, please), because Robin and Joey were taking their yearly “mother/son” trip to Broadway – this time to see The Lion King.
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Most people aren't incredibly familiar with Automatic Data Processing Inc. (Nasdaq: ADP), but it's a company every investor should know.
You see, ADP, which provides payroll and human resources services to businesses, has two important traits that investors need in their portfolios right now.
First, it has virtually no debt. Its unleveraged balance sheet has made it one of the few U.S. companies with a AAA credit rating from Standard & Poor's. It also has a perfect credit rating from Moody's Corp. (NYSE: MCO).
Companies with such a high rating from S&P are rare, and the number of countries with that rating is dwindling. Even the United States is no longer in the AAA group. But this isn't the only special category in which ADP belongs.
It's also a "Dividend Aristocrat." This is the title Standard & Poor's gives companies that boast a AAA rating and have a history of raising their dividends for at least 25 years. There are currently only three U.S. stocks that are both "Dividend Aristocrats" and have a AAA rating from S&P – two things investors should look for in this volatile environment.
That's why it's time to buy Automatic Data Processing, a debt-free, steady dividend payer with a solid future. (**)
The once-deep list of U.S.-listed AAA companies has dwindled to a small group of four. I've recommended a couple of them before –Microsoft Corp. (Nasdaq: MSFT) and Exxon Mobil Corp. (NYSE: XOM). Johnson & Johnson (NYSE: JNJ) is the fourth.