Vanguard Group Inc. Acquires 286,818 Shares of Paychex, Inc. (NASDAQ:PAYX)

Key Points

• Vanguard Group Inc. increased its stake in Paychex, owning over 31.8 million shares after acquiring an additional 286,818 shares, representing 8.83% of the company's stock valued at approximately $4.9 billion.
• Paychex recently reported earnings of $1.19 per share for the quarter, matching analysts' expectations, while annualizing its dividend at $4.32, yielding 3.1%.
• Wall Street analysts have varied opinions on Paychex, with a consensus "Hold" rating and a target price averaging around $150.20, though Morgan Stanley has recently lowered its price target.

Vanguard Group Inc. grew its holdings in Paychex, Inc. (NASDAQ:PAYX - Free Report) by 0.9% during the first quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The firm owned 31,807,843 shares of the business services provider's stock after purchasing an additional 286,818 shares during the quarter. Vanguard Group Inc. owned about 8.83% of Paychex worth $4,907,314,000 as of its most recent filing with the Securities and Exchange Commission (SEC).

Other hedge funds and other institutional investors also recently made changes to their positions in the company. Alpine Bank Wealth Management purchased a new position in Paychex in the first quarter valued at approximately $34,000. MorganRosel Wealth Management LLC bought a new position in Paychex in the first quarter valued at $34,000. Tsfg LLC increased its stake in Paychex by 122.3% in the first quarter. Tsfg LLC now owns 229 shares of the business services provider's stock valued at $35,000 after acquiring an additional 126 shares during the last quarter. Transce3nd LLC bought a new position in Paychex in the fourth quarter valued at $44,000. Finally, HWG Holdings LP bought a new position in shares of Paychex during the first quarter valued at about $46,000. 83.47% of the stock is owned by institutional investors and hedge funds.

Paychex Price Performance

PAYX stock traded up $0.67 during mid-day trading on Friday, hitting $141.19. The company had a trading volume of 1,367,957 shares, compared to its average volume of 2,028,548. The company has a market capitalization of $50.86 billion, a price-to-earnings ratio of 30.90, a P/E/G ratio of 3.23 and a beta of 0.91. Paychex, Inc. has a 12-month low of $123.00 and a 12-month high of $161.24. The company has a quick ratio of 1.28, a current ratio of 1.28 and a debt-to-equity ratio of 1.10. The company has a 50-day moving average price of $147.42 and a 200 day moving average price of $148.42.

Paychex (NASDAQ:PAYX - Get Free Report) last announced its quarterly earnings results on Wednesday, June 25th. The business services provider reported $1.19 EPS for the quarter, hitting the consensus estimate of $1.19. The business had revenue of $1.43 billion for the quarter, compared to analysts' expectations of $1.38 billion. Paychex had a net margin of 29.75% and a return on equity of 45.01%. During the same quarter in the previous year, the company earned $1.12 EPS. On average, research analysts anticipate that Paychex, Inc. will post 4.99 earnings per share for the current year.

Paychex Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Friday, August 29th. Stockholders of record on Monday, July 21st will be given a dividend of $1.08 per share. This represents a $4.32 annualized dividend and a dividend yield of 3.1%. The ex-dividend date is Monday, July 21st. Paychex's dividend payout ratio is currently 94.53%.

Wall Street Analysts Forecast Growth

PAYX has been the subject of a number of analyst reports. JPMorgan Chase & Co. increased their target price on shares of Paychex from $140.00 to $148.00 and gave the stock an "underweight" rating in a report on Wednesday, June 18th. Stifel Nicolaus decreased their target price on shares of Paychex from $156.00 to $152.00 and set a "hold" rating for the company in a research note on Thursday, June 26th. Royal Bank Of Canada set a $165.00 target price on shares of Paychex and gave the company a "sector perform" rating in a research note on Tuesday, June 24th. Citigroup set a $158.00 target price on shares of Paychex and gave the company a "neutral" rating in a research note on Tuesday, June 24th. Finally, Jefferies Financial Group set a $140.00 target price on shares of Paychex and gave the company a "hold" rating in a research note on Thursday, June 26th. One research analyst has rated the stock with a sell rating and ten have assigned a hold rating to the company. Based on data from MarketBeat, the company has an average rating of "Hold" and a consensus price target of $150.20.

Insider Activity

In related news, Chairman Martin Mucci sold 97,526 shares of the company's stock in a transaction dated Thursday, July 10th. The shares were sold at an average price of $145.17, for a total transaction of $14,157,849.42. Following the transaction, the chairman directly owned 446,917 shares in the company, valued at approximately $64,878,940.89. This represents a 17.91% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, CEO John B. Gibson sold 12,370 shares of the company's stock in a transaction dated Wednesday, July 16th. The shares were sold at an average price of $141.92, for a total transaction of $1,755,550.40. Following the transaction, the chief executive officer owned 81,755 shares in the company, valued at $11,602,669.60. The trade was a 13.14% decrease in their ownership of the stock. The disclosure for this sale can be found here. 11.40% of the stock is currently owned by corporate insiders.

About Paychex

Paychex, Inc, together with its subsidiaries, provides integrated human capital management solutions (HCM) for payroll, benefits, human resources (HR), and insurance services for small to medium-sized businesses in the United States, Europe, and India. It offers payroll processing services; payroll tax administration services; employee payment services; and regulatory compliance services, such as new-hire reporting and garnishment processing.