Alley Investment Management Company LLC Raises Stock Holdings in Paychex, Inc. $PAYX

Key Points

• Alley Investment Management increased its Paychex stake by 22.2% in the first quarter, adding 36,486 shares and bringing its holdings to 200,847 shares worth about $18.5 million.
• Paychex reported better-than-expected quarterly results, with EPS of $1.32 and revenue of $1.61 billion, while also raising its quarterly dividend to $1.19 per share for a 4.8% annualized yield.
• Wall Street remains mixed on the stock: analysts currently rate Paychex as a Hold overall with a consensus price target of $105.80, even as some firms raised or cut their targets recently.

Alley Investment Management Company LLC increased its holdings in shares of Paychex, Inc. (NASDAQ:PAYX - Free Report) by 22.2% in the first quarter, according to its most recent filing with the SEC. The fund owned 200,847 shares of the business services provider's stock after acquiring an additional 36,486 shares during the period. Paychex comprises 2.3% of Alley Investment Management Company LLC's portfolio, making the stock its 14th biggest position. Alley Investment Management Company LLC owned about 0.06% of Paychex worth $18,502,000 as of its most recent SEC filing.

A number of other large investors also recently bought and sold shares of PAYX. Vanguard Group Inc. grew its holdings in shares of Paychex by 12.1% in the fourth quarter. Vanguard Group Inc. now owns 42,348,625 shares of the business services provider's stock worth $4,750,669,000 after purchasing an additional 4,583,157 shares during the last quarter. Capital International Investors boosted its holdings in shares of Paychex by 59.1% in the fourth quarter. Capital International Investors now owns 30,265,174 shares of the business services provider's stock valued at $3,395,583,000 after purchasing an additional 11,243,295 shares during the period. State Street Corp boosted its holdings in shares of Paychex by 1.6% in the fourth quarter. State Street Corp now owns 13,988,393 shares of the business services provider's stock valued at $1,569,218,000 after purchasing an additional 216,045 shares during the period. Charles Schwab Investment Management Inc. grew its stake in Paychex by 2.3% in the fourth quarter. Charles Schwab Investment Management Inc. now owns 11,550,173 shares of the business services provider's stock worth $1,295,698,000 after purchasing an additional 263,152 shares in the last quarter. Finally, Geode Capital Management LLC grew its stake in Paychex by 0.8% in the fourth quarter. Geode Capital Management LLC now owns 9,705,424 shares of the business services provider's stock worth $1,093,958,000 after purchasing an additional 78,760 shares in the last quarter. Hedge funds and other institutional investors own 83.47% of the company's stock.

Insider Activity at Paychex

In other news, Director Joseph M. Tucci sold 3,907 shares of the stock in a transaction on Friday, June 26th. The stock was sold at an average price of $98.25, for a total transaction of $383,862.75. Following the completion of the sale, the director owned 67,364 shares in the company, valued at approximately $6,618,513. This represents a 5.48% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Corporate insiders own 0.80% of the company's stock.

Analysts Set New Price Targets

A number of equities research analysts have weighed in on the company. Wells Fargo & Company decreased their target price on Paychex from $116.00 to $95.00 and set an "underweight" rating for the company in a research report on Thursday, March 26th. Citigroup raised Paychex from a "neutral" rating to a "buy" rating and increased their price target for the stock from $99.00 to $140.00 in a research report on Monday, June 15th. Morgan Stanley raised their price target on Paychex from $107.00 to $109.00 and gave the company an "equal weight" rating in a research note on Tuesday. Robert W. Baird decreased their price objective on Paychex from $148.00 to $125.00 and set a "neutral" rating for the company in a report on Thursday, March 26th. Finally, JPMorgan Chase & Co. upped their price objective on shares of Paychex from $100.00 to $105.00 and gave the stock an "underweight" rating in a research note on Thursday, June 25th. One research analyst has rated the stock with a Strong Buy rating, two have given a Buy rating, ten have issued a Hold rating and four have issued a Sell rating to the stock. According to data from MarketBeat.com, the stock currently has an average rating of "Hold" and a consensus target price of $105.80.

Paychex Stock Down 1.5%

Shares of NASDAQ PAYX opened at $98.33 on Wednesday. The company has a current ratio of 1.26, a quick ratio of 1.26 and a debt-to-equity ratio of 1.22. The stock has a market capitalization of $35.23 billion, a PE ratio of 20.11 and a beta of 0.84. The stock's fifty day simple moving average is $95.90 and its two-hundred day simple moving average is $98.86. Paychex, Inc. has a 12-month low of $85.45 and a 12-month high of $148.76.

Paychex (NASDAQ:PAYX - Get Free Report) last released its quarterly earnings results on Wednesday, June 24th. The business services provider reported $1.32 EPS for the quarter, topping the consensus estimate of $1.31 by $0.01. Paychex had a return on equity of 50.90% and a net margin of 27.03%.The firm had revenue of $1.61 billion during the quarter, compared to analyst estimates of $1.60 billion. During the same period in the previous year, the company posted $1.19 EPS. The business's revenue for the quarter was up 12.5% compared to the same quarter last year. Paychex has set its FY 2027 guidance at 5.900-6.010 EPS. As a group, analysts expect that Paychex, Inc. will post 5.96 EPS for the current fiscal year.

Paychex Increases Dividend

The firm also recently declared a quarterly dividend, which was paid on Friday, May 29th. Stockholders of record on Wednesday, May 13th were given a dividend of $1.19 per share. The ex-dividend date of this dividend was Wednesday, May 13th. This is a boost from Paychex's previous quarterly dividend of $1.08. This represents a $4.76 dividend on an annualized basis and a dividend yield of 4.8%. Paychex's payout ratio is currently 97.34%.

About Paychex

Paychex, Inc, founded in 1971 by B. Thomas "Tom" Golisano and headquartered in Rochester, New York, is a provider of payroll, human resources, and benefits outsourcing solutions for small- and medium-sized businesses. The company's core services include payroll processing and tax filing, employee benefits administration, retirement services, and workers' compensation administration, designed to simplify back-office operations and help clients comply with regulatory and tax requirements.

Paychex offers an integrated technology platform, marketed under the Paychex Flex brand, which delivers cloud-based payroll, HR, time and attendance, and reporting tools.

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