Dividend Growth Stock Overview: CDK Global, Inc.

CDK Global, formerly ADP's Dealer Services business segment, provides
IT and customer management services to the retail automobile industry.
Photo courtesy Mike Mozart/flickr.com.

About CDK Global

CDK Global was created when S&P Dividend Aristocrat ADP spun off its Dealer Services business in October 2014.  ADP shareholders received 1 share of CDK Global for every three shares of ADP they owned.  ADP does not retain any ownership of CDK Global.

CDK Global provides information technology and digital marketing support to the retail automotive industry.  CDK Global generates revenues through sales of software applications and software licenses to auto dealerships, used car dealers, heavy equipment dealers, auto repair shops, and vehicle manufacturers.  The company has over 27,000 clients in more than 100 countries.

CDK Global’s applications are either installed on-site at the client’s location or available via a CDK-managed cloud based service.  The applications are designed to assist clients with their standard accounting procedures and marketing processes, but are tailored to the retail automobile market.  This means that the company’s applications help track service orders, the ordering of OEM and aftermarket auto parts, vehicle inventory, and auto lot management.  CDK Global also owns the Cobalt brand of digital marketing and advertising solutions, which helps maintain client websites, and build e-mail and social media marketing programs.  In addition to being sold directly to dealerships, Cobalt products are marketed to dealers through arrangements with 10 leading auto manufacturers.

The company is a member of the S&P Mid Cap 400 index and S&P’s High Yield Dividend Aristocrats index, and trades under the ticker symbol CDK.

CDK Global’s Dividend and Stock Split History

CDK Global has not been in operation as a separate company for very long and, as such, has not established an extensive dividend growth record on its own.

By Standard & Poor’s methodology, companies that are spun off from Dividend Aristocrats and High Yield Dividend Aristocrats retain the dividend growth characteristics of their parent company. As long as CDK begins and continues to increase dividends annually, it will remain part of the High Yield Dividend Aristocrats index.

Since initiating dividends in 2014, CDK has grown its quarterly dividend by 25% from 12 cents to 15 cents a share, for a compounded growth rate of 5.7%.

CDK Global has not split its stock since the spinoff from ADP.

CDK Global’s Direct Purchase and Dividend Reinvestment Plans

Like ADP, CDK Global does not have a direct purchase or a dividend reinvestment plan. In order to invest in CDK Global stock, you’ll need to purchase it through a broker. Most brokers will allow you to reinvest dividends without any fee. Ask your broker for more information on how to set this up if you are interested.

Helpful Links

CDK Global’s Investor Relations Website

Current quote and financial summary for CDK Global (finviz.com)

 

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