Raleigh Capital Management Inc. Raises Position in Paychex, Inc. $PAYX

Key Points

• Raleigh Capital Management boosted its Paychex stake by 126.4% in the first quarter, adding 14,425 shares and bringing its total holdings to 25,835 shares valued at about $2.38 million.
• Paychex reported better-than-expected quarterly results, with EPS of $1.32 and revenue of $1.61 billion, both slightly ahead of analyst estimates; revenue also rose 12.5% year over year.
• The company raised its quarterly dividend to $1.19 per share, equal to a 4.5% annualized yield, while analysts currently rate the stock a consensus “Hold” with an average price target of $105.80.

Raleigh Capital Management Inc. raised its position in shares of Paychex, Inc. (NASDAQ:PAYX - Free Report) by 126.4% during the 1st quarter, according to the company in its most recent 13F filing with the SEC. The institutional investor owned 25,835 shares of the business services provider's stock after acquiring an additional 14,425 shares during the quarter. Raleigh Capital Management Inc.'s holdings in Paychex were worth $2,380,000 at the end of the most recent quarter.

A number of other hedge funds and other institutional investors have also recently made changes to their positions in the company. Capital International Investors lifted its stake in shares of Paychex by 59.1% in the 4th quarter. Capital International Investors now owns 30,265,174 shares of the business services provider's stock valued at $3,395,583,000 after purchasing an additional 11,243,295 shares during the period. Vanguard Group Inc. grew its stake in Paychex by 12.1% in the fourth quarter. Vanguard Group Inc. now owns 42,348,625 shares of the business services provider's stock worth $4,750,669,000 after purchasing an additional 4,583,157 shares during the period. Federated Hermes Inc. grew its stake in Paychex by 4,141.2% in the fourth quarter. Federated Hermes Inc. now owns 2,409,229 shares of the business services provider's stock worth $270,267,000 after purchasing an additional 2,352,423 shares during the period. Norges Bank bought a new position in Paychex in the fourth quarter worth $257,699,000. Finally, Voloridge Investment Management LLC bought a new position in Paychex in the third quarter worth $117,809,000. Hedge funds and other institutional investors own 83.47% of the company's stock.

Wall Street Analysts Forecast Growth

A number of brokerages have recently commented on PAYX. Robert W. Baird dropped their target price on shares of Paychex from $148.00 to $125.00 and set a "neutral" rating on the stock in a report on Thursday, March 26th. Stephens reduced their target price on shares of Paychex from $125.00 to $105.00 and set an "equal weight" rating on the stock in a research report on Thursday, March 26th. Royal Bank Of Canada reiterated a "sector perform" rating on shares of Paychex in a research note on Thursday, May 28th. Stifel Nicolaus lifted their price target on shares of Paychex from $105.00 to $110.00 and gave the company a "hold" rating in a research report on Wednesday, June 17th. Finally, Argus raised shares of Paychex to a "strong-buy" rating in a research note on Friday, March 27th. One research analyst has rated the stock with a Strong Buy rating, two have assigned a Buy rating, ten have issued a Hold rating and four have issued a Sell rating to the stock. Based on data from MarketBeat.com, Paychex has an average rating of "Hold" and an average price target of $105.80.

Paychex Price Performance

Shares of NASDAQ:PAYX opened at $106.35 on Friday. The company has a current ratio of 1.26, a quick ratio of 1.26 and a debt-to-equity ratio of 1.22. The stock has a fifty day simple moving average of $96.60 and a two-hundred day simple moving average of $98.76. Paychex, Inc. has a 12-month low of $85.45 and a 12-month high of $148.11. The stock has a market capitalization of $38.10 billion, a price-to-earnings ratio of 21.75 and a beta of 0.84.

Paychex (NASDAQ:PAYX - Get Free Report) last released its earnings results 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 return on equity of 50.90% and a net margin of 27.03%.The firm had revenue of $1.61 billion for the quarter, compared to analysts' expectations of $1.60 billion. During the same period in the prior year, the firm posted $1.19 earnings per share. The company'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, research analysts anticipate that Paychex, Inc. will post 5.97 earnings per share for the current fiscal year.

Paychex Increases Dividend

The company also recently declared a quarterly dividend, which was paid on Friday, May 29th. Investors of record on Wednesday, May 13th were paid a $1.19 dividend. This represents a $4.76 dividend on an annualized basis and a yield of 4.5%. 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 presently 97.34%.

Insider Buying and Selling

In other Paychex 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 transaction of $383,862.75. Following the completion of the sale, the director directly owned 67,364 shares in the company, valued at approximately $6,618,513. This trade represents a 5.48% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this hyperlink. Company insiders own 0.80% of the company's stock.

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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