Paychex, Inc. (NASDAQ:PAYX) Plans Dividend Increase – $0.98 Per Share

Paychex, Inc. (NASDAQ:PAYX) announced a quarterly dividend on Wednesday, May 1st, Wall Street Journal reports. Shareholders of record on Friday, May 10th will be given a dividend of 0.98 per share by the business services provider on Thursday, May 30th. This represents a $3.92 annualized dividend and a yield of 3.23%. The ex-dividend date of this dividend is Thursday, May 9th. This is a boost from Paychex’s previous quarterly dividend of $0.89.

Paychex has increased its dividend payment by an average of 11.7% annually over the last three years and has increased its dividend annually for the last 13 consecutive years. Paychex has a dividend payout ratio of 67.3% meaning its dividend is sufficiently covered by earnings. Equities analysts expect Paychex to earn $4.97 per share next year, which means the company should continue to be able to cover its $3.56 annual dividend with an expected future payout ratio of 71.6%.

Paychex Stock Down 0.5 %

PAYX traded down $0.56 during midday trading on Wednesday, hitting $121.23. The company had a trading volume of 57,866 shares, compared to its average volume of 1,766,334. Paychex has a 52 week low of $104.09 and a 52 week high of $129.70. The company has a quick ratio of 1.24, a current ratio of 1.24 and a debt-to-equity ratio of 0.21. The company has a market capitalization of $43.64 billion, a price-to-earnings ratio of 26.53, a PEG ratio of 3.39 and a beta of 0.93. The stock’s 50 day moving average price is $121.40 and its 200 day moving average price is $120.48.

Paychex (NASDAQ:PAYX) last posted its earnings results on Tuesday, April 2nd. The business services provider reported $1.38 EPS for the quarter, topping the consensus estimate of $1.37 by $0.01. Paychex had a net margin of 31.86% and a return on equity of 46.14%. The company had revenue of $1.44 billion during the quarter, compared to the consensus estimate of $1.46 billion. During the same period in the previous year, the firm posted $1.29 earnings per share. The firm’s revenue for the quarter was up 4.2% on a year-over-year basis. On average, research analysts anticipate that Paychex will post 4.71 earnings per share for the current fiscal year.

Paychex announced that its Board of Directors has approved a share buyback plan on Friday, January 19th that allows the company to buyback $400.00 million in outstanding shares. This buyback authorization allows the business services provider to purchase up to 0.9% of its stock through open market purchases. Stock buyback plans are generally a sign that the company’s management believes its stock is undervalued.

Wall Street Analysts Forecast Growth

PAYX has been the topic of a number of recent research reports. Royal Bank of Canada restated a “sector perform” rating and set a $130.00 price target on shares of Paychex in a research note on Wednesday, April 3rd. Bank of America upped their target price on shares of Paychex from $108.00 to $111.00 and gave the stock an “underperform” rating in a report on Wednesday, April 3rd. TD Cowen decreased their target price on shares of Paychex from $122.00 to $121.00 and set a “hold” rating on the stock in a report on Wednesday, April 3rd. Evercore ISI reaffirmed an “in-line” rating and set a $118.00 target price on shares of Paychex in a report on Tuesday, March 26th. Finally, Wedbush reaffirmed a “neutral” rating and set a $115.00 target price on shares of Paychex in a report on Wednesday, April 3rd. Two equities research analysts have rated the stock with a sell rating and ten have given a hold rating to the stock. Based on data from MarketBeat, Paychex presently has a consensus rating of “Hold” and a consensus target price of $123.00.

About Paychex

Paychex, Inc provides integrated human capital management solutions for human resources (HR), payroll, benefits, 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.