Capital Research Global Investors Purchases 398,376 Shares of Paychex, Inc. $PAYX

Key Points

• Capital Research Global Investors increased its Paychex stake by 26.2% in the fourth quarter, buying 398,376 more shares and bringing its total holding to 1,917,806 shares valued at about $215.1 million.
• Paychex reported better-than-expected quarterly results, with EPS of $1.71 and revenue of $1.81 billion, both topping analyst estimates. Revenue rose 19.9% year over year.
• The company raised its quarterly dividend to $1.19 per share, or $4.76 annualized, yielding about 4.8%. However, analysts remain cautious overall, with a consensus rating of “Reduce.”

Capital Research Global Investors boosted its position in Paychex, Inc. (NASDAQ:PAYX - Free Report) by 26.2% during the fourth quarter, according to the company in its most recent filing with the Securities & Exchange Commission. The fund owned 1,917,806 shares of the business services provider's stock after acquiring an additional 398,376 shares during the period. Capital Research Global Investors owned 0.53% of Paychex worth $215,139,000 at the end of the most recent reporting period.

A number of other large investors have also added to or reduced their stakes in the company. Vanguard Group Inc. boosted its position in shares of Paychex by 12.1% during the fourth quarter. Vanguard Group Inc. now owns 42,348,625 shares of the business services provider's stock valued at $4,750,669,000 after purchasing an additional 4,583,157 shares in the last quarter. Capital International Investors boosted its position in shares of 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 in the last quarter. Geode Capital Management LLC boosted its position in shares of Paychex by 0.8% during the fourth quarter. Geode Capital Management LLC now owns 9,705,424 shares of the business services provider's stock valued at $1,093,958,000 after purchasing an additional 78,760 shares in the last quarter. Select Equity Group L.P. boosted its position in shares of Paychex by 15.9% during the second quarter. Select Equity Group L.P. now owns 4,051,413 shares of the business services provider's stock valued at $589,319,000 after purchasing an additional 557,101 shares in the last quarter. Finally, Dimensional Fund Advisors LP boosted its position in shares of Paychex by 1.1% during the third quarter. Dimensional Fund Advisors LP now owns 2,805,391 shares of the business services provider's stock valued at $355,650,000 after purchasing an additional 31,321 shares in the last quarter. Institutional investors own 83.47% of the company's stock.

Paychex Stock Down 1.6%

Shares of Paychex stock opened at $98.92 on Tuesday. The company has a debt-to-equity ratio of 1.13, a quick ratio of 1.26 and a current ratio of 1.26. The stock has a market capitalization of $35.44 billion, a PE ratio of 21.79 and a beta of 0.84. Paychex, Inc. has a 52-week low of $85.45 and a 52-week high of $159.38. The company has a 50-day simple moving average of $93.28 and a two-hundred day simple moving average of $100.27.

Paychex (NASDAQ:PAYX - Get Free Report) last issued its earnings results on Wednesday, March 25th. The business services provider reported $1.71 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.67 by $0.04. The business had revenue of $1.81 billion during the quarter, compared to analysts' expectations of $1.78 billion. Paychex had a net margin of 25.84% and a return on equity of 48.52%. The business's revenue for the quarter was up 19.9% compared to the same quarter last year. During the same period in the previous year, the company earned $1.49 earnings per share. On average, analysts anticipate that Paychex, Inc. will post 5.5 EPS for the current fiscal year.

Paychex Increases Dividend

The company also recently announced a quarterly dividend, which was paid on Friday, May 29th. Shareholders of record on Wednesday, May 13th were issued a $1.19 dividend. This represents a $4.76 annualized dividend and a yield of 4.8%. This is a boost from Paychex's previous quarterly dividend of $1.08. The ex-dividend date of this dividend was Wednesday, May 13th. Paychex's dividend payout ratio is presently 104.85%.

Wall Street Analysts Forecast Growth

Several research firms recently weighed in on PAYX. BMO Capital Markets lifted their price target on Paychex to $52.00 and gave the company an "outperform" rating in a research report on Thursday, March 26th. Royal Bank Of Canada reissued a "sector perform" rating on shares of Paychex in a research report on Thursday, May 28th. Stephens lowered their price target on shares of Paychex from $125.00 to $105.00 and set an "equal weight" rating for the company in a research report on Thursday, March 26th. Wells Fargo & Company lowered their price target on shares of Paychex from $116.00 to $95.00 and set an "underweight" rating for the company in a research report on Thursday, March 26th. Finally, UBS Group lowered their price target on shares of Paychex from $98.00 to $94.00 and set a "neutral" rating for the company in a research report on Monday, April 13th. One equities research analyst has rated the stock with a Strong Buy rating, one has issued a Buy rating, twelve have issued a Hold rating and four have assigned a Sell rating to the company. According to MarketBeat, the company has a consensus rating of "Reduce" and an average price target of $106.63.

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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