Bank of New York Mellon Corp Makes New $193.56 Million Investment in Paychex, Inc. $PAYX

Key Points

• Bank of New York Mellon initiated a $193.6 million Paychex stake, purchasing 1.97 million shares, or approximately 0.55% of the company. Institutional investors collectively own 83.47% of Paychex.
• Paychex exceeded quarterly expectations, reporting $1.32 in EPS and $1.61 billion in revenue, with revenue up 12.5% year over year. The company also declared a quarterly dividend of $1.19, representing a 3.8% annualized yield.
• Analyst sentiment remains mixed, with a consensus “Hold” rating and an average price target of $109.20, below the reported share price of $124.47. Two company insiders also recently sold shares.

Bank of New York Mellon Corp purchased a new stake in Paychex, Inc. (NASDAQ:PAYX - Free Report) during the second quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission. The institutional investor purchased 1,968,422 shares of the business services provider's stock, valued at approximately $193,555,000. Bank of New York Mellon Corp owned 0.55% of Paychex as of its most recent SEC filing.

A number of other institutional investors and hedge funds have also added to or reduced their stakes in the stock. Vanguard Group Inc. boosted its holdings in Paychex by 12.1% during 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 buying an additional 4,583,157 shares during the last quarter. Capital International Investors grew its holdings in Paychex by 59.1% during 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 increased its stake in 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 in the last quarter. Charles Schwab Investment Management Inc. raised its stake in Paychex by 2.3% during the 4th 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 buying an additional 263,152 shares during the period. Finally, Geode Capital Management LLC increased its holdings in shares of 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 acquiring an additional 78,760 shares in the last quarter. Institutional investors own 83.47% of the company's stock.

Analyst Ratings Changes

Several research analysts have recently weighed in on the company. TD Cowen upped their price objective on Paychex from $94.00 to $98.00 and gave the stock a "hold" rating in a research report on Monday, June 8th. JPMorgan Chase & Co. upped their price objective on shares of Paychex from $100.00 to $105.00 and gave the company an "underweight" rating in a report on Thursday, June 25th. Morgan Stanley raised their target price on shares of Paychex from $107.00 to $109.00 and gave the stock an "equal weight" rating in a research note on Tuesday, June 30th. Cantor Fitzgerald reiterated an "underweight" rating and issued a $107.00 price target on shares of Paychex in a research note on Monday, July 20th. Finally, Citigroup raised their price objective on shares of Paychex from $140.00 to $150.00 and gave the stock a "buy" rating in a research report on Thursday, July 30th. One investment analyst has rated the stock with a Strong Buy rating, two have assigned a Buy rating, ten have assigned a Hold rating and four have issued a Sell rating to the stock. Based on data from MarketBeat.com, the company has an average rating of "Hold" and a consensus price target of $109.20.

Paychex Stock Performance

NASDAQ PAYX opened at $124.47 on Friday. The company has a quick ratio of 1.26, a current ratio of 1.26 and a debt-to-equity ratio of 1.22. The company has a market capitalization of $44.27 billion, a P/E ratio of 25.45 and a beta of 0.81. Paychex, Inc. has a 12-month low of $85.45 and a 12-month high of $141.19. The firm has a 50-day moving average price of $111.08 and a two-hundred day moving average price of $100.01.

Paychex (NASDAQ:PAYX - Get Free Report) last announced its 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 net margin of 27.03% and a return on equity of 50.90%. The company had revenue of $1.61 billion for the quarter, compared to analysts' expectations of $1.60 billion. During the same period last year, the firm earned $1.19 earnings per share. The business's revenue for the quarter was up 12.5% on a year-over-year basis. Paychex has set its FY 2027 guidance at 5.900-6.010 EPS. Analysts anticipate that Paychex, Inc. will post 5.96 earnings per share for the current year.

Paychex Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Friday, August 28th. Shareholders of record on Tuesday, July 28th will be issued a $1.19 dividend. The ex-dividend date of this dividend is Tuesday, July 28th. This represents a $4.76 annualized dividend and a yield of 3.8%. Paychex's payout ratio is currently 97.34%.

Insider Buying and Selling at Paychex

In related news, Director Joseph M. Tucci sold 3,907 shares of the company's stock in a transaction dated Friday, June 26th. The shares were 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 of the company's stock, valued at $6,618,513. This represents a 5.48% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available through the SEC website. Also, CFO Robert L. Schrader sold 2,600 shares of the company's stock in a transaction that occurred on Monday, July 20th. The stock was sold at an average price of $115.09, for a total transaction of $299,234.00. Following the sale, the chief financial officer directly owned 18,547 shares of the company's stock, valued at approximately $2,134,574.23. This trade represents a 12.29% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. 0.80% of the stock is owned by insiders.

Paychex Company Profile

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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