Swedbank AB Trims Stock Position in Paychex, Inc. $PAYX

Key Points

• Swedbank AB reduced its Paychex stake by 11.4% in the fourth quarter, selling 23,356 shares and leaving it with 182,156 shares valued at about $20.4 million.
• Paychex reported better-than-expected quarterly results, posting $1.71 EPS on $1.81 billion in revenue, both ahead of analyst estimates, with revenue up 19.9% year over year.
• The company boosted its quarterly dividend to $1.19 per share and authorized a $1.0 billion share repurchase program, while analysts currently have a consensus “Reduce” rating and an average price target of $106.38.

Swedbank AB cut its stake in shares of Paychex, Inc. (NASDAQ:PAYX - Free Report) by 11.4% in the 4th quarter, according to the company in its most recent filing with the Securities & Exchange Commission. The fund owned 182,156 shares of the business services provider's stock after selling 23,356 shares during the period. Swedbank AB owned approximately 0.05% of Paychex worth $20,434,000 as of its most recent SEC filing.

Other institutional investors and hedge funds have also recently added to or reduced their stakes in the company. Vermillion & White Wealth Management Group LLC purchased a new stake in Paychex during the 3rd quarter valued at approximately $27,000. Cornerstone Planning Group LLC raised its stake in shares of Paychex by 957.1% during the 4th quarter. Cornerstone Planning Group LLC now owns 296 shares of the business services provider's stock worth $30,000 after buying an additional 268 shares in the last quarter. Stance Capital LLC purchased a new position in shares of Paychex during the 3rd quarter worth approximately $31,000. MMA Asset Management LLC purchased a new position in shares of Paychex during the 3rd quarter worth approximately $32,000. Finally, Board of the Pension Protection Fund purchased a new position in shares of Paychex during the 4th quarter worth approximately $34,000. 83.47% of the stock is owned by hedge funds and other institutional investors.

Paychex Stock Performance

PAYX opened at $93.93 on Friday. The stock has a market cap of $33.65 billion, a P/E ratio of 20.69 and a beta of 0.84. The company has a debt-to-equity ratio of 1.13, a current ratio of 1.26 and a quick ratio of 1.26. The stock's 50 day simple moving average is $92.50 and its 200 day simple moving average is $103.62. Paychex, Inc. has a 1-year low of $85.45 and a 1-year high of $161.24.

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

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

Paychex Increases Dividend

The business also recently announced a quarterly dividend, which will be paid on Friday, May 29th. Shareholders of record on Wednesday, May 13th will be issued a dividend of $1.19 per share. This is a boost from Paychex's previous quarterly dividend of $1.08. The ex-dividend date is Wednesday, May 13th. This represents a $4.76 dividend on an annualized basis and a yield of 5.1%. Paychex's payout ratio is currently 95.15%.

Wall Street Analyst Weigh In

A number of equities analysts have recently issued reports on PAYX shares. BMO Capital Markets increased their target price on Paychex to $52.00 and gave the stock an "outperform" rating in a research note on Thursday, March 26th. Robert W. Baird cut their target price on Paychex from $148.00 to $125.00 and set a "neutral" rating for the company in a research note on Thursday, March 26th. TD Cowen cut their target price on Paychex from $95.00 to $94.00 and set a "hold" rating for the company in a research note on Tuesday, April 7th. Cantor Fitzgerald raised Paychex to a "strong sell" rating in a research note on Tuesday, January 27th. Finally, Royal Bank Of Canada cut their target price on Paychex from $125.00 to $102.00 and set a "sector perform" rating for the company in a research note on Thursday, March 19th. One equities research analyst has rated the stock with a Strong Buy rating, one has assigned a Buy rating, twelve have given a Hold rating and four have given a Sell rating to the stock. According to data from MarketBeat.com, Paychex has a consensus rating of "Reduce" and an average price target of $106.38.

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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