Back to top

Image: Bigstock

Is Paychex (PAYX) Outperforming Other Business Services Stocks This Year?

Read MoreHide Full Article

For those looking to find strong Business Services stocks, it is prudent to search for companies in the group that are outperforming their peers. Has Paychex (PAYX - Free Report) been one of those stocks this year? A quick glance at the company's year-to-date performance in comparison to the rest of the Business Services sector should help us answer this question.

Paychex is one of 320 individual stocks in the Business Services sector. Collectively, these companies sit at #9 in the Zacks Sector Rank. The Zacks Sector Rank considers 16 different sector groups. The average Zacks Rank of the individual stocks within the groups is measured, and the sectors are listed from best to worst.

The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. Paychex is currently sporting a Zacks Rank of #2 (Buy).

Over the past three months, the Zacks Consensus Estimate for PAYX's full-year earnings has moved 3.2% higher. This is a sign of improving analyst sentiment and a positive earnings outlook trend.

Our latest available data shows that PAYX has returned about 1.7% since the start of the calendar year. Meanwhile, the Business Services sector has returned an average of -10.5% on a year-to-date basis. This means that Paychex is performing better than its sector in terms of year-to-date returns.

Visa (V - Free Report) is another Business Services stock that has outperformed the sector so far this year. Since the beginning of the year, the stock has returned 4.5%.

Over the past three months, Visa's consensus EPS estimate for the current year has increased 1.5%. The stock currently has a Zacks Rank #2 (Buy).

Looking more specifically, Paychex belongs to the Outsourcing industry, which includes 14 individual stocks and currently sits at #64 in the Zacks Industry Rank. Stocks in this group have lost about 4.1% so far this year, so PAYX is performing better this group in terms of year-to-date returns.

In contrast, Visa falls under the Financial Transaction Services industry. Currently, this industry has 41 stocks and is ranked #161. Since the beginning of the year, the industry has moved +0.7%.

Paychex and Visa could continue their solid performance, so investors interested in Business Services stocks should continue to pay close attention to these stocks.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Visa Inc. (V) - free report >>

Paychex, Inc. (PAYX) - free report >>

Published in