For those looking to find strong Business Services stocks, it is prudent to search for companies in the group that are outperforming their peers. Paychex (PAYX - Free Report) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? One simple way to answer this question is to take a look at the year-to-date performance of PAYX and the rest of the Business Services group's stocks.
Paychex is a member of the Business Services sector. This group includes 189 individual stocks and currently holds a Zacks Sector Rank of #11. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the average Zacks Rank of the individual stocks within the groups.
The Zacks Rank is a proven model that highlights a variety of stocks with the right characteristics to outperform the market over the next one to three months. The system emphasizes earnings estimate revisions and favors companies with improving earnings outlooks. PAYX is currently sporting a Zacks Rank of #2 (Buy).
Over the past 90 days, the Zacks Consensus Estimate for PAYX's full-year earnings has moved 0.35% higher. This means that analyst sentiment is stronger and the stock's earnings outlook is improving.
Our latest available data shows that PAYX has returned about 6.49% since the start of the calendar year. In comparison, Business Services companies have returned an average of 14.87%. This means that Paychex is performing better than its sector in terms of year-to-date returns.
Looking more specifically, PAYX belongs to the Outsourcing industry, which includes 16 individual stocks and currently sits at #180 in the Zacks Industry Rank. This group has gained an average of 17.38% so far this year, so PAYX is slightly underperforming its industry in this area.
PAYX will likely be looking to continue its solid performance, so investors interested Business Services stocks should continue to pay close attention to the company.