Paychex, Inc. (NASDAQ:PAYX) Declares Quarterly Dividend of $0.98

Paychex, Inc. (NASDAQ:PAYX) declared a quarterly dividend on Thursday, May 2nd, Wall Street Journal reports. Shareholders of record on Friday, May 10th will be paid 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 dividend yield of 3.31%. The ex-dividend date is Thursday, May 9th. This is a boost from Paychex’s previous quarterly dividend of $0.89.

Paychex has raised its dividend payment by an average of 11.7% annually over the last three years and has increased its dividend every year for the last 13 years. Paychex has a dividend payout ratio of 67.3% meaning its dividend is sufficiently covered by earnings. 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 Stock Down 0.8 %

Shares of NASDAQ:PAYX traded down $0.96 during midday trading on Thursday, reaching $118.45. The company had a trading volume of 1,465,760 shares, compared to its average volume of 1,802,732. The stock has a market capitalization of $42.64 billion, a P/E ratio of 26.02, a PEG ratio of 3.35 and a beta of 0.93. The stock’s fifty day moving average price is $121.69 and its 200-day moving average price is $120.40. The company has a debt-to-equity ratio of 0.21, a current ratio of 1.24 and a quick ratio of 1.24. Paychex has a one year low of $104.09 and a one year high of $129.70.

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

Paychex announced that its Board of Directors has initiated a stock buyback plan on Friday, January 19th that permits the company to buyback $400.00 million in outstanding shares. This buyback authorization permits the business services provider to buy up to 0.9% of its stock through open market purchases. Stock buyback plans are typically a sign that the company’s leadership believes its stock is undervalued.

Analysts Set New Price Targets

PAYX has been the subject of several research reports. Bank of America lifted their target price on Paychex from $108.00 to $111.00 and gave the stock an “underperform” rating in a research report on Wednesday, April 3rd. Wedbush reiterated a “neutral” rating and set a $115.00 target price on shares of Paychex in a research note on Wednesday, April 3rd. Evercore ISI restated an “in-line” rating and issued a $118.00 price target on shares of Paychex in a research report on Tuesday, March 26th. Royal Bank of Canada reaffirmed a “sector perform” rating and set a $130.00 price objective on shares of Paychex in a research report on Wednesday, April 3rd. Finally, TD Cowen cut their target price on shares of Paychex from $122.00 to $121.00 and set a “hold” rating on the stock in a report on Wednesday, April 3rd. Two research analysts have rated the stock with a sell rating and ten have assigned a hold rating to the company’s stock. Based on data from MarketBeat, the stock currently has a consensus rating of “Hold” and an average 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.