Paychex, Inc. (NASDAQ:PAYX) Raises Dividend to $0.98 Per Share

Paychex, Inc. (NASDAQ:PAYX) declared 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 annualized dividend and a yield of 3.25%. The ex-dividend date of this dividend is Thursday, May 9th. This is an increase from Paychex’s previous quarterly dividend of $0.89.

Paychex has raised its dividend payment by an average of 11.7% per year over the last three years and has increased 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. 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 Stock Up 0.4 %

Shares of NASDAQ:PAYX opened at $120.63 on Tuesday. The company’s fifty day moving average is $121.42 and its 200-day moving average is $120.44. The company has a debt-to-equity ratio of 0.21, a quick ratio of 1.24 and a current ratio of 1.24. Paychex has a 52 week low of $104.09 and a 52 week high of $129.70. The company has a market capitalization of $43.42 billion, a PE ratio of 26.28, a P/E/G ratio of 3.39 and a beta of 0.93.

Paychex (NASDAQ:PAYX) last released its quarterly earnings results on Tuesday, April 2nd. The business services provider reported $1.38 EPS for the quarter, beating analysts’ consensus estimates of $1.37 by $0.01. The firm had revenue of $1.44 billion for the quarter, compared to analyst estimates of $1.46 billion. Paychex had a net margin of 31.86% and a return on equity of 46.14%. The company’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 business earned $1.29 earnings per share. Equities research analysts predict that Paychex will post 4.71 earnings per share for the current fiscal year.

Wall Street Analyst Weigh In

PAYX has been the subject of a number of research reports. Evercore ISI restated an “in-line” rating and issued a $118.00 target price on shares of Paychex in a research note on Tuesday, March 26th. Royal Bank of Canada restated a “sector perform” rating and issued a $130.00 price objective on shares of Paychex in a research report on Wednesday, April 3rd. Bank of America upped their target price 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. Wedbush reissued a “neutral” rating and issued a $115.00 price target on shares of Paychex in a report on Wednesday, April 3rd. Finally, TD Cowen reduced their price objective on Paychex from $122.00 to $121.00 and set a “hold” rating on the stock in a report on Wednesday, April 3rd. Two equities research analysts have rated the stock with a sell rating and ten have issued a hold rating to the company’s stock. Based on data from MarketBeat, the stock has an average rating of “Hold” and a consensus price target of $123.00.

Paychex declared that its board has approved a share repurchase program on Friday, January 19th that allows the company to repurchase $400.00 million in outstanding shares. This repurchase authorization allows the business services provider to buy up to 0.9% of its shares through open market purchases. Shares repurchase programs are usually an indication that the company’s board believes its shares are undervalued.

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.