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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 (2017-2022) CAGR of 7.9%. 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 $999.6 million, $908.7 million and $889.4 million, and repurchased shares worth $145.2 million, $155.7 million and $171.9, respectively, in fiscal 2022, 2021 and 2020. Such initiatives not only instill investors’ confidence on the stock but also positively impact earnings per share.
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). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2 offer attractive 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. 11 estimates for fiscal 2024 have moved north over the past 30 days versus no southward revision, reflecting analysts’ confidence in the stock. Over the same period, the Zacks Consensus Estimate for fiscal 2024 earnings has moved 1.5% north.
Positive Earnings Surprise History: Paychex has an impressive earnings surprise history. The company’s earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average beat of 3.4%.
Strong Growth Prospects: The Zacks Consensus Estimate for Paychex’s fiscal 2024 earnings of $4.68 per share reflects year-over-year growth of 9.6%. Earnings are expected to register 6.4% growth in fiscal 2025. The stock has long-term expected earnings per share growth rate of 7.5%.
Other Stocks to Consider
Investors interested in the Zacks Business Services sector can also consider the following top-ranked stocks.
Aptiv (APTV - Free Report) currently has a Zacks Rank of 2. The Zacks Consensus Estimate for the bottom line is pegged at $1.01 per share, up more than 100% from the year-ago figure. The consensus mark for revenues is pegged at $4.7 billion, up 15.8% from the figure reported a year ago. APTV had an average negative surprise of 8.1% in the previous four quarters.
Avis Budget (CAR - Free Report) currently carries a Zacks Rank of 2. The Zacks Consensus Estimate for earnings is pegged at $9.78 per share, down 38.6% from the year-ago figure. The consensus mark for revenues is pegged at $3.19 billion, down 1.6% from the prior-year figure. CAR had an average surprise of 65.2% in the previous four quarters.
S&P Global (SPGI - Free Report) currently has a Zacks Rank of 2. The Zacks Consensus Estimate for the bottom line is pegged at $3.09 per share, up 10% from the year-ago reported figure. The consensus mark for revenues is pegged at $3.05 billion, up 1.9% from the prior-year reported figure. SPGI had an average surprise of 3.1% in the previous four quarters.
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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 (2017-2022) CAGR of 7.9%. Higher revenues are likely to expand margins and increase profitability in the long run.
Paychex, Inc. Revenue (TTM)
Paychex, Inc. revenue-ttm | Paychex, Inc. Quote
Paychex puts consistent efforts to reward its shareholders through dividends and share repurchases. The company paid dividends of $999.6 million, $908.7 million and $889.4 million, and repurchased shares worth $145.2 million, $155.7 million and $171.9, respectively, in fiscal 2022, 2021 and 2020. Such initiatives not only instill investors’ confidence on the stock but also positively impact earnings per share.
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). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2 offer attractive 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. 11 estimates for fiscal 2024 have moved north over the past 30 days versus no southward revision, reflecting analysts’ confidence in the stock. Over the same period, the Zacks Consensus Estimate for fiscal 2024 earnings has moved 1.5% north.
Positive Earnings Surprise History: Paychex has an impressive earnings surprise history. The company’s earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average beat of 3.4%.
Strong Growth Prospects: The Zacks Consensus Estimate for Paychex’s fiscal 2024 earnings of $4.68 per share reflects year-over-year growth of 9.6%. Earnings are expected to register 6.4% growth in fiscal 2025. The stock has long-term expected earnings per share growth rate of 7.5%.
Other Stocks to Consider
Investors interested in the Zacks Business Services sector can also consider the following top-ranked stocks.
Aptiv (APTV - Free Report) currently has a Zacks Rank of 2. The Zacks Consensus Estimate for the bottom line is pegged at $1.01 per share, up more than 100% from the year-ago figure. The consensus mark for revenues is pegged at $4.7 billion, up 15.8% from the figure reported a year ago. APTV had an average negative surprise of 8.1% in the previous four quarters.
Avis Budget (CAR - Free Report) currently carries a Zacks Rank of 2. The Zacks Consensus Estimate for earnings is pegged at $9.78 per share, down 38.6% from the year-ago figure. The consensus mark for revenues is pegged at $3.19 billion, down 1.6% from the prior-year figure. CAR had an average surprise of 65.2% in the previous four quarters.
S&P Global (SPGI - Free Report) currently has a Zacks Rank of 2. The Zacks Consensus Estimate for the bottom line is pegged at $3.09 per share, up 10% from the year-ago reported figure. The consensus mark for revenues is pegged at $3.05 billion, up 1.9% from the prior-year reported figure. SPGI had an average surprise of 3.1% in the previous four quarters.