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Reasons to Add Paychex (PAYX) Stock to Your Portfolio Now
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Paychex, Inc. (PAYX - Free Report) has grown meaningfully over the years by providing industry-leading service and technology solutions to its clients and their employees. Its solid business model, diversified products and services, and strategic acquisitions have boosted top-line growth. Revenues witnessed a five-year (2016-2021) CAGR of 6.5%. Higher revenues will expand margins and increase profitability in the long run.
Paychex puts consistent efforts to reward its shareholders through dividends and share repurchases. The company paid dividends of $889.4 million, $826.8 million and $739.7 million, and repurchased shares worth $171.9 million, $56.9 million and $143.1 million, respectively, in fiscal 2020, 2019 and 2018. It recently declared a dividend hike of 20%, raising its quarterly cash dividend from 66 cents per share to 79 cents.
Let’s have a look at some other factors that make PAYX an attractive pick:
Solid Rank: Paychex currently carries a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2 offer attractive investment opportunities. Thus, the company is a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: The direction of estimate revisions serves as an important pointer when it comes to the price of a stock. Ten estimates for fiscal 2022 moved north over the past 60 days versus no southward revision, reflecting analysts’ confidence in the stock. Over the same period, the Zacks Consensus Estimate for fiscal 2022 earnings has moved 3% north.
Positive Earnings Surprise History: Paychex has an impressive earnings surprise history. The company’s earnings outpaced the Zacks Consensus Estimate in all of the trailing four quarters, delivering an average beat of 10.8%.
Strong Growth Prospects: The Zacks Consensus Estimate for Paychex’s fiscal 2022 earnings, $3.75 per share, reflects year-over-year growth of 23.4%. Earnings are expected to register 8.5% growth in fiscal 2023. The stock has a long-term expected earnings per share growth rate of 7.5%.
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Reasons to Add Paychex (PAYX) Stock to Your Portfolio Now
Paychex, Inc. (PAYX - Free Report) has grown meaningfully over the years by providing industry-leading service and technology solutions to its clients and their employees. Its solid business model, diversified products and services, and strategic acquisitions have boosted top-line growth. Revenues witnessed a five-year (2016-2021) CAGR of 6.5%. Higher revenues will expand margins and increase profitability in the long run.
Paychex puts consistent efforts to reward its shareholders through dividends and share repurchases. The company paid dividends of $889.4 million, $826.8 million and $739.7 million, and repurchased shares worth $171.9 million, $56.9 million and $143.1 million, respectively, in fiscal 2020, 2019 and 2018. It recently declared a dividend hike of 20%, raising its quarterly cash dividend from 66 cents per share to 79 cents.
Paychex, Inc. Dividend (TTM)
Paychex, Inc. dividend-ttm | Paychex, Inc. Quote
Let’s have a look at some other factors that make PAYX an attractive pick:
Solid Rank: Paychex currently carries a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2 offer attractive investment opportunities. Thus, the company is a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: The direction of estimate revisions serves as an important pointer when it comes to the price of a stock. Ten estimates for fiscal 2022 moved north over the past 60 days versus no southward revision, reflecting analysts’ confidence in the stock. Over the same period, the Zacks Consensus Estimate for fiscal 2022 earnings has moved 3% north.
Positive Earnings Surprise History: Paychex has an impressive earnings surprise history. The company’s earnings outpaced the Zacks Consensus Estimate in all of the trailing four quarters, delivering an average beat of 10.8%.
Strong Growth Prospects: The Zacks Consensus Estimate for Paychex’s fiscal 2022 earnings, $3.75 per share, reflects year-over-year growth of 23.4%. Earnings are expected to register 8.5% growth in fiscal 2023. The stock has a long-term expected earnings per share growth rate of 7.5%.
Paychex, Inc. Price and EPS Surprise
Paychex, Inc. price-eps-surprise | Paychex, Inc. Quote
Other Stocks to Consider
Some other top-ranked stocks in the broader Zacks Business Services sector are Avis Budget Group, Inc. (CAR - Free Report) , Cross Country Healthcare (CCRN - Free Report) and Automatic Data Processing, Inc. (ADP - Free Report) .
Avis Budget sports a Zacks Rank #1 at present. CAR has a long-term earnings growth expectation of 19.4%.
Avis Budget delivered a trailing four-quarter earnings surprise of 102%, on average.
Cross Country Healthcare sports a Zacks Rank of 1. CCRN has a long-term earnings growth expectation of 6.9%.
Cross Country Healthcare delivered a trailing four-quarter earnings surprise of 29.2%, on average.
Automatic Data Processing carries a Zacks Rank of 2, currently. ADP has a long-term earnings growth expectation of 12%.
Automatic Data Processing delivered a trailing four-quarter earnings surprise of 6.2%, on average.