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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 its top-line growth. Revenues witnessed a five-year (2016-2021) CAGR of 6.5%. Higher revenues are likely to 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 $908.7 million, $889.4 million and $826.8 million, and repurchased shares worth $155.7 million, $171.9 million and $56.9 million, respectively, in fiscal 2021, 2020 and 2019. Such initiatives not only instill investors’ confidence but also positively impact earnings per share.
Paychex shares have gained 6.3% in the past month, outperforming the 5.9% rise of the industry it belongs to.
Let’s take a look at some other factors that make PAYX an attractive pick:
Solid Rank: Paychex currently carries a Zacks Rank #2 (Buy) and has a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition. 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. Nine estimates for fiscal 2023 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 1.7% north.
Positive Earnings Surprise History: Paychex has an impressive earnings surprise history. The company’s earnings outpaced the Zacks Consensus Estimate in all the trailing four quarters, delivering an average beat of 8.6%.
Strong Growth Prospects: The Zacks Consensus Estimate for Paychex’s fiscal 2023 earnings of $4.21 per share reflects year-over-year growth of 11.7%. Earnings are expected to register 7.4% growth in fiscal 2024. The stock has a long-term expected earnings per share growth rate of 7.5%.
Other Stocks to Consider
Some other top-ranked stocks in the broader Zacks Business Services sector are Booz Allen Hamilton Holding Corporation (BAH - Free Report) and Cross Country Healthcare, Inc. (CCRN - Free Report) .
Booz Allen carries a Zacks Rank #2 at present. BAH has a long-term earnings growth expectation of 7.5%.
Booz Allen delivered a trailing four-quarter earnings surprise of 8.8%, on average.
Cross Country Healthcare currently carries a Zacks Rank #2. CCRN has a long-term earnings growth expectation of 6%.
CCRN delivered a trailing four-quarter earnings surprise of 10.1%, on average.
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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 its top-line growth. Revenues witnessed a five-year (2016-2021) CAGR of 6.5%. Higher revenues are likely to 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 $908.7 million, $889.4 million and $826.8 million, and repurchased shares worth $155.7 million, $171.9 million and $56.9 million, respectively, in fiscal 2021, 2020 and 2019. Such initiatives not only instill investors’ confidence but also positively impact earnings per share.
Paychex shares have gained 6.3% in the past month, outperforming the 5.9% rise of the industry it belongs to.
Paychex, Inc. Price
Paychex, Inc. price | Paychex, Inc. Quote
Let’s take a look at some other factors that make PAYX an attractive pick:
Solid Rank: Paychex currently carries a Zacks Rank #2 (Buy) and has a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition. 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. Nine estimates for fiscal 2023 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 1.7% north.
Positive Earnings Surprise History: Paychex has an impressive earnings surprise history. The company’s earnings outpaced the Zacks Consensus Estimate in all the trailing four quarters, delivering an average beat of 8.6%.
Strong Growth Prospects: The Zacks Consensus Estimate for Paychex’s fiscal 2023 earnings of $4.21 per share reflects year-over-year growth of 11.7%. Earnings are expected to register 7.4% growth in fiscal 2024. The stock has a long-term expected earnings per share growth rate of 7.5%.
Other Stocks to Consider
Some other top-ranked stocks in the broader Zacks Business Services sector are Booz Allen Hamilton Holding Corporation (BAH - Free Report) and Cross Country Healthcare, Inc. (CCRN - Free Report) .
Booz Allen carries a Zacks Rank #2 at present. BAH has a long-term earnings growth expectation of 7.5%.
Booz Allen delivered a trailing four-quarter earnings surprise of 8.8%, on average.
Cross Country Healthcare currently carries a Zacks Rank #2. CCRN has a long-term earnings growth expectation of 6%.
CCRN delivered a trailing four-quarter earnings surprise of 10.1%, on average.