Paychex, Inc. (NASDAQ:PAYX) Announces Dividend Increase – $1.19 Per Share

Paychex, Inc. (NASDAQ:PAYX) announced a quarterly dividend on Friday, May 1st. Shareholders of record on Wednesday, May 13th will be given a dividend of 1.19 per share by the business services provider on Friday, May 29th. This represents a c) dividend on an annualized basis and a yield of 5.1%. The ex-dividend date is Wednesday, May 13th. This is a 10.2% increase from Paychex’s previous quarterly dividend of $1.08.

Paychex has increased its dividend payment by an average of 0.1%per year over the last three years and has raised its dividend annually for the last 3 consecutive years. Paychex has a payout ratio of 84.0% indicating that its dividend is currently covered by earnings, but may not be in the future if the company’s earnings decline. Equities research analysts expect Paychex to earn $5.91 per share next year, which means the company should continue to be able to cover its $4.76 annual dividend with an expected future payout ratio of 80.5%.

Paychex Price Performance

Paychex stock opened at $93.93 on Monday. Paychex has a 1-year low of $85.45 and a 1-year high of $161.24. 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 has a market cap of $33.65 billion, a PE ratio of 20.69 and a beta of 0.84. The stock’s fifty day moving average is $92.50 and its two-hundred day moving average is $103.62.

Paychex (NASDAQ:PAYX) last posted its quarterly earnings results on Wednesday, March 25th. The business services provider reported $1.71 earnings per share for the quarter, beating analysts’ consensus estimates of $1.67 by $0.04. Paychex had a return on equity of 48.52% and a net margin of 25.84%.The company had revenue of $1.81 billion for the quarter, compared to analysts’ expectations of $1.78 billion. During the same period last year, the firm earned $1.49 earnings per share. Paychex’s quarterly revenue was up 19.9% on a year-over-year basis. On average, sell-side analysts expect that Paychex will post 5.5 EPS for the current fiscal year.

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

About Paychex

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.