Automatic Data Processing (ADP) is a sell at its present share price. Automatic Data processing showed up in my screening of DGI+ Club database of dividend-paying stocks as likely to provide above average returns at present share price. Closer analysis and review does not confirm that preliminary assessment. High unemployment resulting from COVID-19 is expected to last well beyond the end of the COVID-19 pandemic, the end of which in itself is highly uncertain. This will have an adverse impact on ADP's earnings for an indefinite period. The main issue with ADP's share price is the company has been attracting a very high P/E multiple due to a record of high EPS growth. A combination of a reduction in EPS due COVID-19 and a reduction in P/E multiple due to curtailed growth represents a double whammy for the share price. That impact has likely not yet been fully felt. It might not be fully reflected in the share price until full-year results through end of June are announced in July or thereabouts. The company has a solid balance sheet, with negligible net debt, and will likely continue to show positive, although reduced, earnings, and will certainly survive through this pandemic. The issue is purely with the share price which has not adjusted sufficiently to reflect the environment the company now operates in.

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