Paychex, Inc. $PAYX Shares Bought by Dimensional Fund Advisors LP

Key Points

• Dimensional Fund Advisors raised its Paychex stake by 1.1% to 2,805,391 shares (worth $355.7M); Vanguard and other institutions also increased holdings, leaving institutional ownership at about 83.47%.
• Paychex beat Q results with $1.26 EPS vs $1.23 expected and revenue of $1.56B (up 18.3% YoY), and set FY2026 guidance of EPS $5.48–5.53 versus analyst consensus of 4.99.
• The company is returning capital via a quarterly dividend of $1.08 (annualized $4.32, yield 4.4%) and a $1.0B share buyback authorization (up to 2.5% of shares), though the dividend payout ratio is high at ~98%.

Dimensional Fund Advisors LP raised its stake in shares of Paychex, Inc. (NASDAQ:PAYX - Free Report) by 1.1% during the third quarter, according to its most recent 13F filing with the Securities and Exchange Commission. The institutional investor owned 2,805,391 shares of the business services provider's stock after purchasing an additional 31,321 shares during the quarter. Dimensional Fund Advisors LP owned about 0.78% of Paychex worth $355,650,000 at the end of the most recent reporting period.

A number of other hedge funds and other institutional investors have also made changes to their positions in PAYX. Vanguard Group Inc. grew its holdings in shares of Paychex by 17.2% during the third quarter. Vanguard Group Inc. now owns 37,765,468 shares of the business services provider's stock valued at $4,787,151,000 after buying an additional 5,549,511 shares during the last quarter. Norges Bank purchased a new stake in Paychex during the 2nd quarter valued at about $302,244,000. Marshall Wace LLP increased its holdings in shares of Paychex by 179.5% in the second quarter. Marshall Wace LLP now owns 1,078,328 shares of the business services provider's stock valued at $156,854,000 after purchasing an additional 692,533 shares during the period. JPMorgan Chase & Co. raised its stake in shares of Paychex by 29.2% in the second quarter. JPMorgan Chase & Co. now owns 2,542,901 shares of the business services provider's stock worth $369,901,000 after purchasing an additional 574,337 shares during the last quarter. Finally, Assenagon Asset Management S.A. lifted its holdings in shares of Paychex by 209.1% during the third quarter. Assenagon Asset Management S.A. now owns 838,679 shares of the business services provider's stock worth $106,311,000 after purchasing an additional 567,352 shares during the period. Hedge funds and other institutional investors own 83.47% of the company's stock.

Paychex Stock Performance

PAYX opened at $98.32 on Friday. The firm has a fifty day moving average price of $102.52 and a 200 day moving average price of $115.90. Paychex, Inc. has a 1 year low of $86.89 and a 1 year high of $161.24. The stock has a market cap of $35.29 billion, a P/E ratio of 22.29 and a beta of 0.91. The company has a debt-to-equity ratio of 1.17, a current ratio of 1.27 and a quick ratio of 1.27.

Paychex (NASDAQ:PAYX - Get Free Report) last released its quarterly earnings data on Friday, December 19th. The business services provider reported $1.26 earnings per share for the quarter, beating analysts' consensus estimates of $1.23 by $0.03. The company had revenue of $1.56 billion during the quarter, compared to analysts' expectations of $1.55 billion. Paychex had a net margin of 26.45% and a return on equity of 46.38%. The firm's revenue for the quarter was up 18.3% on a year-over-year basis. During the same quarter in the previous year, the company earned $1.14 earnings per share. Paychex has set its FY 2026 guidance at 5.480-5.530 EPS. Equities research analysts anticipate that Paychex, Inc. will post 4.99 earnings per share for the current year.

Paychex Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Friday, February 27th. Investors of record on Wednesday, January 28th were issued a $1.08 dividend. The ex-dividend date of this dividend was Wednesday, January 28th. This represents a $4.32 dividend on an annualized basis and a yield of 4.4%. Paychex's dividend payout ratio is presently 97.96%.

Paychex announced that its board has approved a share buyback plan on Friday, January 16th that allows the company to repurchase $1.00 billion in shares. This repurchase authorization allows the business services provider to repurchase up to 2.5% of its stock through open market purchases. Stock repurchase plans are typically a sign that the company's board of directors believes its shares are undervalued.

Analysts Set New Price Targets

PAYX has been the topic of several research reports. JPMorgan Chase & Co. cut their price target on shares of Paychex from $140.00 to $125.00 and set an "underweight" rating on the stock in a report on Monday, December 22nd. BMO Capital Markets dropped their price objective on shares of Paychex from $140.00 to $121.00 and set a "market perform" rating on the stock in a report on Tuesday, December 9th. Citigroup cut their price objective on shares of Paychex from $139.00 to $120.00 and set a "neutral" rating on the stock in a research note on Monday, December 22nd. Wolfe Research reduced their target price on shares of Paychex from $130.00 to $115.00 and set an "underperform" rating for the company in a report on Wednesday, December 10th. Finally, TD Cowen restated a "hold" rating on shares of Paychex in a research report on Monday, December 1st. One equities research analyst has rated the stock with a Buy rating, thirteen have given a Hold rating and four have assigned a Sell rating to the company. Based on data from MarketBeat.com, the company presently has an average rating of "Reduce" and a consensus price target of $123.94.

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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