Quick verdict: ADP vs LMT in 2026

In the adp vs lmt stock comparison 2026, Automatic Data Processing (ADP) demonstrates a notable overall edge, showcasing stronger fundamentals across valuation, growth, and profitability metrics. While Lockheed Martin (LMT) remains an analyst favorite, ADP offers considerably more upside potential according to both analyst price targets and discounted cash flow models. Investors considering should i buy adp or lmt stock in 2026 should weigh ADP’s superior financial efficiency and growth against LMT’s strong industry position and analyst sentiment. This is not investment advice.

ADP vs LMT: key metrics side by side

Full side-by-side comparison of ADP and LMT across valuation, profitability, growth and analyst sentiment. Data updated 2026-04-07.

ADP vs LMT valuation comparison

When assessing the adp vs lmt valuation, ADP appears to trade at a more attractive multiple compared to Lockheed Martin. ADP’s Price-to-Earnings (P/E) ratio stands at 19.48x, significantly lower than LMT’s P/E of 29.04x. Similarly, ADP’s Price-to-Book (P/B) ratio is 12.9x, which is also more favorable than LMT’s 21.68x. These metrics suggest that ADP is currently valued more conservatively by the market, especially considering its stronger profitability.

Furthermore, a Discounted Cash Flow (DCF) analysis reveals substantial upside potential for ADP. The model indicates a DCF upside of +83.5% for ADP, which is nearly double the +39.5% upside indicated for LMT. While LMT boasts a larger market capitalization of $145.42B compared to ADP’s $82.62B, ADP’s current valuation implies a much greater margin of safety and potential for price appreciation based on its intrinsic value. Investors focused on `adp vs lmt fundamentals and valuation` might find ADP to be the cheaper option with higher growth potential.

ADP vs LMT growth comparison

In terms of top-line expansion, ADP exhibits stronger momentum in this adp vs lmt stock comparison 2026. Automatic Data Processing reported a year-over-year revenue growth of +7.1%, outpacing Lockheed Martin’s +5.7% revenue growth. This indicates that ADP is expanding its operations and market share at a slightly faster pace, which can be a key consideration for growth-oriented investors looking at future earnings potential.

Beyond revenue growth, ADP’s superior operational efficiency translates into higher quality growth. ADP boasts an EBITDA margin of 30.45% and a net margin of 19.96%, significantly higher than LMT’s EBITDA margin of 11.63% and net margin of 6.68%. These robust margins suggest that ADP is not only growing faster but also converting a larger portion of its revenue into profit, giving it stronger financial leverage and a more appealing growth profile moving forward.

ADP vs LMT profitability

ADP stands out for its exceptional profitability when comparing its metrics against Lockheed Martin’s. Automatic Data Processing demonstrates significantly higher net margins at 19.96%, more than double LMT’s net margin of 6.68%. This indicates that ADP is far more efficient at converting its revenue into actual profit, suggesting stronger operational management and a competitive advantage in its sector. Similarly, ADP’s EBITDA margin of 30.45% dramatically surpasses LMT’s 11.63%, further reinforcing ADP’s superior efficiency at the operational level before interest, taxes, depreciation, and amortization.

While Return on Equity (ROE) data is not available for either company, ADP’s Free Cash Flow (FCF) yield of 5.56% is superior to LMT’s 4.75%. This metric highlights ADP’s better ability to generate cash from its operations after accounting for capital expenditures, giving it more flexibility for reinvestment, debt repayment, or shareholder returns. Furthermore, ADP maintains a healthier balance sheet with a Debt/Equity ratio of 0.72x, considerably lower than LMT’s 3.23x, underscoring ADP’s robust financial health and lower leverage risk. Overall, ADP generates significantly more cash and profit from its operations.

Analyst ratings: ADP vs LMT

When examining analyst sentiment for adp vs lmt stock comparison 2026, there’s a clear divergence in opinion. ADP, with 35 analysts covering the stock, currently has only 20.0% ‘Buy’ ratings, leading to a ‘Hold’ consensus. This suggests a cautious stance from the analyst community, despite ADP’s strong fundamental metrics. The average target price for ADP is $270.5, representing a substantial +32.4% upside from its current price of $204.28.

In contrast, Lockheed Martin (LMT) enjoys a much stronger analyst endorsement. Out of 37 analysts, 54.1% recommend a ‘Buy’ rating, resulting in a consensus of ‘Buy’. This indicates a more optimistic outlook from the majority of analysts on LMT’s near-term prospects. However, LMT’s average target price of $632.7 offers only a modest +0.3% upside from its current price of $630.985, suggesting that much of the optimism may already be priced into the stock.

Should I buy ADP or LMT stock in 2026?

For investors prioritizing growth, Automatic Data Processing (ADP) appears to be the more compelling option in 2026. Its reported revenue growth of +7.1% year-over-year outpaces Lockheed Martin’s (LMT) +5.7%, signifying stronger expansion. Moreover, ADP’s significantly higher net margin of 19.96% compared to LMT’s 6.68% indicates that ADP’s growth is more profitable, translating into better earnings quality and potentially more sustainable long-term performance.

Value investors considering should i buy adp or lmt stock 2026 will find ADP more attractive due to its favorable valuation metrics. ADP’s P/E ratio of 19.48x is considerably lower than LMT’s 29.04x, and its P/B ratio of 12.9x is also superior to LMT’s 21.68x. Critically, ADP also offers a much higher Discounted Cash Flow (DCF) upside of +83.5%, nearly double LMT’s +39.5%. This suggests that ADP is currently undervalued relative to its intrinsic worth, offering a greater margin of safety and potential capital appreciation.

For income-focused investors, neither ADP nor LMT offers a substantial dividend yield, but ADP slightly edges out LMT. ADP’s dividend yield is 0.03%, marginally higher than LMT’s 0.02%. However, for significant income generation, investors might look beyond these two stocks. Ultimately, ADP’s robust fundamentals, superior growth, and more attractive valuation make it a strong contender for investors looking for both growth and value in 2026. This is not investment advice; please conduct your own due diligence.

More ADP and LMT comparisons

ADP full stock analysis · LMT full stock analysis · All stock comparisons

FAQ: ADP vs LMT