We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why Investors Should Retain Paychex (PAYX) Stock Now
Read MoreHide Full Article
Paychex, Inc. (PAYX - Free Report) has grown significantly over the years by providing industry-leading services and technology solutions to its clients and their employees. PAYX’s earnings are anticipated to grow 10.3% and 6.5% in fiscal 2024 and 2025, respectively. The company has a long-term earnings growth expectation of 7.8%.
Factors That Augur Well
Paychex aims to meet clients' HR and payroll needs through a comprehensive and flexible service portfolio. The company’s solid business model, diversified products and services and strategic acquisitions have boosted its top-line growth. Revenues witnessed a five-year (2018-2023) CAGR of 8.2%. Higher revenues are likely to expand margins and increase profitability in the long run.
Demand environment for the company’s Management Solutions and PEO and Insurance Solutions remains strong. Management Solutions revenues increased 4% year over year in the last reported quarter, driven by an increase in the number of clients served across HCM solutions, higher revenues per client from price realization and product penetration, and growth in ancillary services.
PEO and Insurance Solutions revenues increased 8%, driven by expansion in the average number of employees at PEO worksites, increased PEO insurance revenues and higher income from ancillary services.
Commitment to shareholder returns makes Paychex a reliable way for investors to compound wealth over the long term. The company paid dividends of $1.17 billion, $999.6 million and $908.7 million in fiscal 2023, 2022 and 2021, respectively.
A Risk
The outsourcing industry is labor-intensive and heavily dependent on foreign talent. Rising talent costs due to competition is a barrier to the industry’s growth. Paychex, being one of the companies in the industry, may be affected.
Zacks Rank and Stocks to Consider
Paychex currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the broader Business Service sector.
ROL has an impressive earnings surprise history, beating the consensus mark in three of the four trailing quarters and matching once, the average surprise being 7.2%.
FTI Consulting (FCN - Free Report) also carries a Zacks Rank of 2 at present. The consensus mark for fourth-quarter 2023 earnings is pegged at $1.57 per share, indicating 3.3% year-over-year growth.
FCN has an impressive earnings surprise history, beating the consensus mark in three of the four trailing quarters and missing once, the average surprise being 8.5%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Here's Why Investors Should Retain Paychex (PAYX) Stock Now
Paychex, Inc. (PAYX - Free Report) has grown significantly over the years by providing industry-leading services and technology solutions to its clients and their employees. PAYX’s earnings are anticipated to grow 10.3% and 6.5% in fiscal 2024 and 2025, respectively. The company has a long-term earnings growth expectation of 7.8%.
Factors That Augur Well
Paychex aims to meet clients' HR and payroll needs through a comprehensive and flexible service portfolio. The company’s solid business model, diversified products and services and strategic acquisitions have boosted its top-line growth. Revenues witnessed a five-year (2018-2023) CAGR of 8.2%. Higher revenues are likely to expand margins and increase profitability in the long run.
Paychex, Inc. Price
Paychex, Inc. price | Paychex, Inc. Quote
Demand environment for the company’s Management Solutions and PEO and Insurance Solutions remains strong. Management Solutions revenues increased 4% year over year in the last reported quarter, driven by an increase in the number of clients served across HCM solutions, higher revenues per client from price realization and product penetration, and growth in ancillary services.
PEO and Insurance Solutions revenues increased 8%, driven by expansion in the average number of employees at PEO worksites, increased PEO insurance revenues and higher income from ancillary services.
Commitment to shareholder returns makes Paychex a reliable way for investors to compound wealth over the long term. The company paid dividends of $1.17 billion, $999.6 million and $908.7 million in fiscal 2023, 2022 and 2021, respectively.
A Risk
The outsourcing industry is labor-intensive and heavily dependent on foreign talent. Rising talent costs due to competition is a barrier to the industry’s growth. Paychex, being one of the companies in the industry, may be affected.
Zacks Rank and Stocks to Consider
Paychex currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the broader Business Service sector.
Rollins (ROL - Free Report) currently carries a Zacks Rank #2 (Buy). For the fourth quarter of 2023, the Zacks Consensus Estimate for earnings is pegged at 20 cents, indicating year-over-year growth of 17.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ROL has an impressive earnings surprise history, beating the consensus mark in three of the four trailing quarters and matching once, the average surprise being 7.2%.
FTI Consulting (FCN - Free Report) also carries a Zacks Rank of 2 at present. The consensus mark for fourth-quarter 2023 earnings is pegged at $1.57 per share, indicating 3.3% year-over-year growth.
FCN has an impressive earnings surprise history, beating the consensus mark in three of the four trailing quarters and missing once, the average surprise being 8.5%.