Fund Sees Interest-Rate Tailwind in ADP’s Payroll Business
Andrew Hill Investment Fund says interest earned on payroll funds held before distribution adds an earnings benefit for ADP while rates are elevated.
Key takeaways
- Andrew Hill Investment Fund highlighted ADP in its third-quarter 2026 investor letter.
- The fund said interest on client payroll funds adds to ADP’s earnings.
Andrew Hill Investment Fund said interest income from client payroll funds gives Automatic Data Processing an earnings benefit as rates remain elevated. The fund highlighted ADP in its third-quarter 2026 investor letter.
ADP temporarily holds client funds before distributing payroll, the fund said. It described the business as combining recurring software revenue with interest income on billions of dollars in client funds, and said investors may undervalue that combination.
The letter said ADP shares joined a recovery as investor sentiment toward software improved, after the stock was caught in a broader software selloff over the past year. ADP closed at about $264 on Oct. 7, according to the article.
This article was produced with the help of AI technology. Source: Yahoo Finance
