Palmer Knight Co Purchases 13,950 Shares of Paychex, Inc. $PAYX

Key Points

• Palmer Knight Co increased its stake in Paychex by 22.9%, buying 13,950 shares to hold 74,776 shares valued at about $8.39 million, making PAYX its fourth-largest holding (4.4% of the portfolio).
• Wall Street sentiment has softened—several firms cut price targets and MarketBeat shows a consensus rating of "Reduce" (average target $106.38)—while institutional investors own about 83.47% of the stock.
• Paychex recently beat quarterly estimates (EPS $1.71 vs. $1.67; revenue +19.9% YoY), raised its quarterly dividend to $1.19 (a 5.1% yield), and authorized a $1.0 billion share repurchase program (≈2.5% of shares).

Palmer Knight Co lifted its position in Paychex, Inc. (NASDAQ:PAYX - Free Report) by 22.9% in the fourth quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The firm owned 74,776 shares of the business services provider's stock after purchasing an additional 13,950 shares during the quarter. Paychex makes up 4.4% of Palmer Knight Co's investment portfolio, making the stock its 4th biggest holding. Palmer Knight Co's holdings in Paychex were worth $8,388,000 at the end of the most recent quarter.

Several other institutional investors also recently added to or reduced their stakes in PAYX. Vanguard Group Inc. increased its holdings in shares of Paychex by 12.1% in the 4th quarter. Vanguard Group Inc. now owns 42,348,625 shares of the business services provider's stock valued at $4,750,669,000 after acquiring an additional 4,583,157 shares during the period. Select Equity Group L.P. raised its holdings in shares of Paychex by 15.9% in 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 buying an additional 557,101 shares during the last quarter. Dimensional Fund Advisors LP raised its holdings in shares of Paychex by 1.1% in 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 buying an additional 31,321 shares during the last quarter. Ameriprise Financial Inc. boosted its stake in shares of Paychex by 0.8% during the second quarter. Ameriprise Financial Inc. now owns 2,280,715 shares of the business services provider's stock worth $330,908,000 after buying an additional 17,869 shares during the period. Finally, Envestnet Asset Management Inc. increased its position in Paychex by 1.5% in the 3rd quarter. Envestnet Asset Management Inc. now owns 1,979,330 shares of the business services provider's stock valued at $250,900,000 after acquiring an additional 30,117 shares during the period. Institutional investors and hedge funds own 83.47% of the company's stock.

Wall Street Analyst Weigh In

A number of research firms have weighed in on PAYX. JPMorgan Chase & Co. decreased their price objective on Paychex from $125.00 to $100.00 and set an "underweight" rating for the company in a research report on Thursday, March 26th. Wells Fargo & Company lowered their price objective on shares of Paychex from $116.00 to $95.00 and set an "underweight" rating on the stock in a research report on Thursday, March 26th. BMO Capital Markets upped their price objective on shares of Paychex to $52.00 and gave the stock an "outperform" rating in a research report on Thursday, March 26th. Morgan Stanley cut their price target on shares of Paychex from $123.00 to $107.00 and set an "equal weight" rating for the company in a report on Tuesday, April 28th. Finally, UBS Group lowered their price objective on Paychex from $98.00 to $94.00 and set a "neutral" rating on the stock in a report on Monday, April 13th. One analyst has rated the stock with a Strong Buy rating, one has given a Buy rating, twelve have assigned a Hold rating and four have given a Sell rating to the company's stock. Based on data from MarketBeat.com, the company currently has a consensus rating of "Reduce" and an average price target of $106.38.

Paychex Stock Performance

Shares of PAYX opened at $92.85 on Wednesday. The company has a quick ratio of 1.26, a current ratio of 1.26 and a debt-to-equity ratio of 1.13. Paychex, Inc. has a 52-week low of $85.45 and a 52-week high of $161.24. The company has a 50-day simple moving average of $92.30 and a 200-day simple moving average of $104.09. The company has a market capitalization of $33.27 billion, a PE ratio of 20.45 and a beta of 0.84.

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

Paychex Increases Dividend

The company also recently declared a quarterly dividend, which will be paid on Friday, May 29th. Stockholders of record on Wednesday, May 13th will be paid a dividend of $1.19 per share. This is a positive change from Paychex's previous quarterly dividend of $1.08. The ex-dividend date of this dividend is Wednesday, May 13th. This represents a $4.76 annualized dividend and a dividend yield of 5.1%. Paychex's dividend payout ratio is presently 95.15%.

Paychex declared that its Board of Directors has authorized a share repurchase plan on Friday, January 16th that permits the company to repurchase $1.00 billion in shares. This repurchase authorization permits the business services provider to reacquire up to 2.5% of its stock through open market purchases. Stock repurchase plans are usually an indication that the company's leadership believes its stock is undervalued.

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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