Automatic Data Processing, Inc. (ADP)

ADP runs payroll for hundreds of thousands of companies and also earns interest on the money passing through it on the way to employees.

The core product is payroll processing and the tax filings that go with it. The service is mandatory, an error in it costs penalties, and switching providers has to be done at a fiscal-year boundary — hence very high client retention and predictable revenue.

The second, less obvious income source is interest on client funds. Time passes between debiting the employer and paying the employee, and during it ADP invests the balances in short-term instruments. Its results therefore rise with interest rates, which is unusual for a software company.

The figure read as an economic barometer is client headcount: it falls during layoffs before official statistics show it. ADP is a dividend aristocrat with a long record of increases.