Fifth Third Bancorp Buys 127,503 Shares of Paychex, Inc. $PAYX

Key Points

• Fifth Third Bancorp increased its Paychex stake by 361.3% in the first quarter, buying 127,503 additional shares and bringing its total holding to 162,792 shares worth about $15.0 million.
• Paychex reported better-than-expected quarterly results, with EPS of $1.32 topping estimates and revenue of $1.61 billion slightly above forecasts; revenue also rose 12.5% year over year.
• The company raised its quarterly dividend to $1.19 per share, equal to a 4.3% yield, even as analysts remain cautious with an overall Hold rating and consensus price target of $105.80.

Fifth Third Bancorp raised its position in shares of Paychex, Inc. (NASDAQ:PAYX - Free Report) by 361.3% in the first quarter, according to its most recent filing with the SEC. The firm owned 162,792 shares of the business services provider's stock after purchasing an additional 127,503 shares during the quarter. Fifth Third Bancorp's holdings in Paychex were worth $14,996,000 at the end of the most recent quarter.

A number of other hedge funds and other institutional investors have also recently modified their holdings of the company. Vermillion & White Wealth Management Group LLC acquired a new stake in shares of Paychex during the third quarter worth $27,000. Stance Capital LLC bought a new position in Paychex during the third quarter worth $31,000. Hilton Head Capital Partners LLC acquired a new position in Paychex in the fourth quarter valued at $31,000. KERR FINANCIAL PLANNING Corp bought a new stake in Paychex during the third quarter valued at $37,000. Finally, Cornerstone Planning Group LLC grew its holdings in Paychex by 957.1% during the 4th quarter. Cornerstone Planning Group LLC now owns 296 shares of the business services provider's stock worth $30,000 after acquiring an additional 268 shares during the period. Institutional investors and hedge funds own 83.47% of the company's stock.

Insider Activity

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

Analyst Ratings Changes

A number of research analysts have recently issued reports on the company. Stephens dropped their price objective on Paychex from $125.00 to $105.00 and set an "equal weight" rating on the stock in a research note on Thursday, March 26th. Royal Bank Of Canada reiterated a "sector perform" rating on shares of Paychex in a report on Thursday, May 28th. Wells Fargo & Company dropped their price target on Paychex from $116.00 to $95.00 and set an "underweight" rating on the stock in a research note on Thursday, March 26th. Jefferies Financial Group reduced their price objective on shares of Paychex from $110.00 to $105.00 and set a "hold" rating for the company in a research report on Thursday, March 26th. Finally, BMO Capital Markets lifted their price objective on shares of Paychex to $52.00 and gave the company an "outperform" rating in a research note on Thursday, March 26th. One 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 given a Sell rating to the stock. According to MarketBeat, the company currently has an average rating of "Hold" and a consensus price target of $105.80.

Paychex Stock Performance

NASDAQ PAYX opened at $109.52 on Wednesday. The company has a market cap of $39.24 billion, a P/E ratio of 22.40 and a beta of 0.84. The company has a fifty day simple moving average of $98.86 and a 200 day simple moving average of $98.31. The company has a current ratio of 1.26, a quick ratio of 1.26 and a debt-to-equity ratio of 1.22. Paychex, Inc. has a 12-month low of $85.45 and a 12-month high of $148.11.

Paychex (NASDAQ:PAYX - Get Free Report) last posted its earnings results on Wednesday, June 24th. The business services provider reported $1.32 earnings per share for the quarter, topping analysts' consensus estimates 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 analyst estimates of $1.60 billion. During the same quarter in the prior year, the business posted $1.19 EPS. The firm's revenue was up 12.5% compared to the same quarter last year. Paychex has set its FY 2027 guidance at 5.900-6.010 EPS. Sell-side analysts predict that Paychex, Inc. will post 5.96 earnings per share for the current fiscal year.

Paychex Increases Dividend

The company also recently announced a quarterly dividend, which was paid on Friday, May 29th. Stockholders of record on Wednesday, May 13th were paid a $1.19 dividend. This represents a $4.76 annualized dividend and a dividend yield of 4.3%. The ex-dividend date was Wednesday, May 13th. This is a positive change from Paychex's previous quarterly dividend of $1.08. Paychex's dividend payout ratio (DPR) is currently 97.34%.

Paychex 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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