First Trust Advisors LP Boosts Stake in Paychex, Inc. $PAYX

Key Points

• First Trust Advisors LP increased its Paychex stake by 13.5% in the first quarter, adding 278,507 shares and bringing its holdings to 2.34 million shares worth about $215.9 million.
• Paychex reported strong quarterly results, with EPS of $1.32 beating estimates and revenue of $1.61 billion slightly topping forecasts, while revenue rose 12.5% year over year.
• The company declared a quarterly dividend of $1.19 per share, implying an annualized yield of 4.3%, though the payout ratio is high at 97.34%.

First Trust Advisors LP lifted its position in Paychex, Inc. (NASDAQ:PAYX - Free Report) by 13.5% in the first quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The firm owned 2,344,056 shares of the business services provider's stock after purchasing an additional 278,507 shares during the quarter. First Trust Advisors LP owned approximately 0.65% of Paychex worth $215,934,000 at the end of the most recent quarter.

A number of other hedge funds have also recently added to or reduced their stakes in the company. Hilton Head Capital Partners LLC purchased a new stake in Paychex in the fourth quarter valued at approximately $31,000. Cornerstone Planning Group LLC grew its position in shares of Paychex by 957.1% during the fourth 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 last quarter. Kingdom Financial Group LLC. purchased a new position in shares of Paychex during the fourth quarter worth approximately $33,000. Acumen Wealth Advisors LLC acquired a new position in shares of Paychex in the 4th quarter valued at $34,000. Finally, Wealth Watch Advisors INC purchased a new stake in Paychex in the 3rd quarter valued at $42,000. Hedge funds and other institutional investors own 83.47% of the company's stock.

Paychex Stock Performance

NASDAQ:PAYX opened at $110.74 on Thursday. The company has a debt-to-equity ratio of 1.22, a current ratio of 1.26 and a quick ratio of 1.26. The firm has a market cap of $39.39 billion, a price-to-earnings ratio of 22.65 and a beta of 0.84. The firm's fifty day moving average price is $101.26 and its 200 day moving average price is $98.28. Paychex, Inc. has a 1-year low of $85.45 and a 1-year high of $148.11.

Paychex (NASDAQ:PAYX - Get Free Report) last announced its quarterly earnings data on Wednesday, June 24th. The business services provider reported $1.32 EPS 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 during the quarter, compared to the consensus estimate of $1.60 billion. During the same quarter in the prior year, the firm earned $1.19 EPS. Paychex's quarterly revenue was up 12.5% on a year-over-year basis. Paychex has set its FY 2027 guidance at 5.900-6.010 EPS. On average, sell-side analysts expect that Paychex, Inc. will post 5.96 EPS for the current year.

Paychex Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Friday, August 28th. Investors of record on Tuesday, July 28th will be issued a dividend of $1.19 per share. This represents a $4.76 annualized dividend and a yield of 4.3%. The ex-dividend date of this dividend is Tuesday, July 28th. Paychex's dividend payout ratio is currently 97.34%.

Wall Street Analyst Weigh In

PAYX has been the subject of a number of recent research reports. Jefferies Financial Group decreased their price target on shares of Paychex from $110.00 to $105.00 and set a "hold" rating for the company in a research note on Thursday, March 26th. Stifel Nicolaus upped their target price on shares of Paychex from $105.00 to $110.00 and gave the company a "hold" rating in a report on Wednesday, June 17th. TD Cowen increased their target price on shares of Paychex from $94.00 to $98.00 and gave the stock a "hold" rating in a research note on Monday, June 8th. BMO Capital Markets increased their target price on shares of Paychex to $52.00 and gave the stock an "outperform" rating in a research note on Thursday, March 26th. Finally, Wells Fargo & Company lowered their price target on Paychex from $116.00 to $95.00 and set an "underweight" rating on the stock in a report on Thursday, March 26th. 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 given a Sell rating to the company. According to data from MarketBeat.com, Paychex presently has an average rating of "Hold" and a consensus target price of $107.53.

Insider Transactions at Paychex

In related news, Director Joseph M. Tucci sold 3,907 shares of the firm's 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 trade represents a 5.48% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. 0.80% of the stock is owned by corporate insiders.

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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