Paychex, Inc. (NASDAQ:PAYX) Announces Dividend Increase – $0.98 Per Share

Paychex, Inc. (NASDAQ:PAYX) announced a quarterly dividend on Wednesday, May 1st, Wall Street Journal reports. Shareholders of record on Friday, May 10th will be given a dividend of 0.98 per share by the business services provider on Thursday, May 30th. This represents a $3.92 dividend on an annualized basis and a yield of 3.23%. The ex-dividend date is Thursday, May 9th. This is an increase from Paychex’s previous quarterly dividend of $0.89.

Paychex has increased its dividend payment by an average of 11.7% per year over the last three years and has raised its dividend annually for the last 13 consecutive years. Paychex has a payout ratio of 67.3% meaning its dividend is sufficiently covered by earnings. Equities research analysts expect Paychex to earn $4.97 per share next year, which means the company should continue to be able to cover its $3.56 annual dividend with an expected future payout ratio of 71.6%.

Paychex Price Performance

Shares of NASDAQ:PAYX traded down $0.56 during midday trading on Wednesday, hitting $121.23. The stock had a trading volume of 57,866 shares, compared to its average volume of 1,766,334. The company’s 50-day moving average price is $121.40 and its 200-day moving average price is $120.48. The company has a market capitalization of $43.64 billion, a P/E ratio of 26.53, a price-to-earnings-growth ratio of 3.39 and a beta of 0.93. The company has a quick ratio of 1.24, a current ratio of 1.24 and a debt-to-equity ratio of 0.21. Paychex has a fifty-two week low of $104.09 and a fifty-two week high of $129.70.

Paychex (NASDAQ:PAYX) last issued its earnings results on Tuesday, April 2nd. The business services provider reported $1.38 EPS for the quarter, beating the consensus estimate of $1.37 by $0.01. The company had revenue of $1.44 billion during the quarter, compared to analysts’ expectations of $1.46 billion. Paychex had a net margin of 31.86% and a return on equity of 46.14%. The business’s revenue for the quarter was up 4.2% compared to the same quarter last year. During the same period in the previous year, the company earned $1.29 EPS. As a group, equities research analysts predict that Paychex will post 4.71 EPS for the current fiscal year.

Paychex declared that its board has initiated a stock buyback plan on Friday, January 19th that allows the company to buyback $400.00 million in shares. This buyback authorization allows the business services provider to reacquire up to 0.9% of its shares through open market purchases. Shares buyback plans are typically a sign that the company’s board believes its shares are undervalued.

Analyst Upgrades and Downgrades

Several equities analysts have recently issued reports on the stock. Royal Bank of Canada reaffirmed a “sector perform” rating and set a $130.00 price target on shares of Paychex in a research note on Wednesday, April 3rd. Evercore ISI reiterated an “in-line” rating and set a $118.00 price objective on shares of Paychex in a research report on Tuesday, March 26th. Bank of America increased their price objective on shares of Paychex from $108.00 to $111.00 and gave the stock an “underperform” rating in a research report on Wednesday, April 3rd. TD Cowen decreased their price objective on shares of Paychex from $122.00 to $121.00 and set a “hold” rating for the company in a research report on Wednesday, April 3rd. Finally, Wedbush reiterated a “neutral” rating and set a $115.00 price objective on shares of Paychex in a research report on Wednesday, April 3rd. Two investment analysts have rated the stock with a sell rating and ten have given a hold rating to the stock. According to MarketBeat.com, the company has a consensus rating of “Hold” and a consensus target price of $123.00.

Paychex Company Profile

Paychex, Inc provides integrated human capital management solutions for human resources (HR), payroll, benefits, and insurance services for small to medium-sized businesses in the United States, Europe, and India. It offers payroll processing services; payroll tax administration services; employee payment services; and regulatory compliance services, such as new-hire reporting and garnishment processing.