Paychex, Inc. (NASDAQ:PAYX) has recently attracted the attention of various institutional investors, with the State of Michigan Retirement System being one of them. According to its most recent filing with the Securities and Exchange Commission (SEC), the State of Michigan Retirement System increased its holdings in Paychex by 1.0% during the first quarter. This move saw the institutional investor acquire an additional 900 shares, bringing its total ownership to 94,077 shares. As of its most recent SEC filing, these holdings were valued at a staggering $10,780,000.
The interest shown by investors in Paychex comes as no surprise given the company’s solid financial performance and consistent growth over the years. Moreover, Paychex recently announced its decision to declare a quarterly dividend that will be paid on August 24th. Stockholders who are registered as of August 10th will receive a dividend of $0.89 per share. This equates to an annualized dividend payout ratio of 82.79% and a dividend yield of 2.94%. It is worth noting that Paychex has always been committed to rewarding its shareholders through regular dividends.
While dividend announcements often instill confidence in shareholders, it is equally important for investors to examine any significant insider activity within a company. In this regard, Paychex’s Chairman Martin Mucci made headlines when he sold 132,851 shares of the firm’s stock on July 14th at an average price of $120.43 per share, resulting in a total transaction value of $15,999,245.93.
After this transaction, Mucci’s direct ownership in Paychex stands at 459,101 shares valued at approximately $55,289,533.43—an impressive sum indeed. The details about this particular sale were disclosed through a document filed with the SEC and can be accessed via their official website.
In addition to Mucci, Director Joseph M. Tucci also made moves in the company, selling 10,850 shares of Paychex’s stock on July 10th at an average price of $115.99 per share. The total value of this transaction amounted to $1,258,491.50. Following this sale, Tucci now possesses 53,460 shares in Paychex with an estimated value of approximately $6,200,825.40.
These insider transactions indicate a level of activity within the company that could attract the attention of investors and analysts alike. While it is not uncommon for insiders to sell their shares periodically for various reasons such as diversification or personal financial planning purposes, it is essential to monitor these activities closely.
It is worth noting that multiple sales transactions were carried out by Paychex insiders during the last quarter. These totaled 155,857 shares and had a combined value of $18,631,609. This level of insider selling cannot be ignored and serves as a reminder for investors to exercise caution when evaluating the stock’s potential performance.
Being aware of insider activity—namely buying or selling—can provide valuable insights into a company’s prospects and future direction. Investors should consider this information in conjunction with other fundamental and technical analyses to form a comprehensive view about Paychex’s outlook.
As the disclosure statements suggest, insiders currently own around 11.50% of Paychex’s stock—an indicator that they hold considerable interest in the success of the company. However, investors should always bear in mind that insider activity alone does not determine future stock performance; it merely serves as one piece of a larger puzzle.
Given its impressive financials and consistent growth trajectory, Paychex Inc., as a business services provider specializing in payroll processing and human resources management solutions for small- to medium-sized businesses (SMBs), continues to attract both institutional investors like the State of Michigan Retirement System and individual investors seeking long-term growth opportunities.
In conclusion, understanding the recent activities within Paychex, Inc., including the state of its institutional holdings, dividend announcements, and insider transactions, is vital for investors looking to make informed decisions. By keeping an eye on such factors alongside other relevant market information, individuals can position themselves strategically and confidently when assessing the potential of this leading business services provider in today’s evolving landscape.
Updated on: 03/03/2024
Debt to equity ratio: Neutral
Price to earnings ratio: Strong Buy
Price to book ratio: Strong Buy
ROE: Strong Buy
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|Analyst / firm
Institutional Investor Holdings and Analyst Outlook: A Look at Paychex, Inc.
Paychex, Inc. (PAYX) has seen some recent activity in its institutional investor holdings, leading to modifications and increases in stake. One notable investor, Raleigh Capital Management Inc., reported a significant growth of 117.8% in the fourth quarter, resulting in the acquisition of an additional 119 shares valued at $25,000. Similarly, Heritage Wealth Management LLC experienced an increase of 260.0% in their Paychex holdings during the same period, adding another 169 shares worth $27,000 to their portfolio.
Additionally, CarsonAllaria Wealth Management Ltd. acquired a new stake of Paychex shares valued at around $28,000 during the fourth quarter, while Red Tortoise LLC and New England Capital Financial Advisors LLC followed suit by purchasing new positions worth approximately $29,000 and $45,000 respectively.
These movements have had a significant impact on the ownership structure of Paychex as a company. As of now, approximately 72.16% of the stock is held by institutional investors and hedge funds. This level of ownership from financial institutions demonstrates a high degree of confidence in Paychex’s performance and potential for future growth.
Research firms have also been actively commenting on Paychex’s performance in the market. For instance, Robert W. Baird recently reduced their target price for Paychex from $134.00 to $126.00 in one report issued on July 3rd this year.
Barclays also lowered their target price from $109.00 to $106.00 as mentioned in their research note published on July 2nd.
On the other hand, Stifel Nicolaus increased their price target for Paychex from $119.00 to $122.00 with a “hold” rating being assigned to the stock back in March.
Meanwhile, JPMorgan Chase & Co., which previously set a target price at $123.00, revised it to $114.00 and categorized the stock as “underweight” in one of their research reports issued on June 30th.
Bank of America also adjusted their target price for Paychex from $105.00 to $103.00 based on their research findings released on June 30th.
Overall, analysts have presented varying outlooks on Paychex’s future performance, with three analysts giving the stock a sell rating, five assigning a hold rating, and three recommending a buy rating. Bloomberg has reported that the stock currently holds a consensus rating of “Hold” with an average price target of $120.87.
In terms of dividends, Paychex recently declared a quarterly dividend which will be paid on August 24th this year. Stockholders recorded as of August 10th will receive a dividend amounting to $0.89 per share.
This translates to an annualized dividend of $3.56 and a dividend yield of 2.94%. Investors interested in receiving these dividends should note that the ex-dividend date is set for August 9th.
Looking at the recent trading activity, shares of PAYX opened at $121.03 on July 18th. The company boasts a debt-to-equity ratio of 0.23, highlighting its healthy financial position and stability.
Paychex has a current ratio of 1.30 and a quick ratio of 1.27, indicating its ability to meet short-term obligations swiftly in case they arise.
The company currently holds a market capitalization value of $43.63 billion, with a reasonably high P/E ratio of 28.15 and a P/E/G ratio (price-earnings to growth) standing at 3.44 based on analyst expectations for future earnings growth.
Furthermore, Paychex has demonstrated consistent market performance over the past year, with its share prices ranging between $104.09 and $139.47.
Paychex recently released its quarterly earnings report on June 29th, revealing an EPS (earnings per share) of $0.97 for the quarter, in line with analysts’ consensus estimate.
The company also reported a return on equity (ROE) of 46.79% and a net margin of 31.10%. While Paychex’s revenue for the quarter came in slightly lower than analyst estimates at $1.20 billion compared to an expected $1.22 billion, it still represented a healthy increase of 6.7% compared to the previous year.
Based on these observed figures, equities research analysts predict that Paychex will achieve an EPS of approximately 4.68 for the current fiscal year.
In conclusion, Paychex, Inc. has seen recent modifications in its holdings by institutional investors, indicating positive sentiment towards the company’s future growth prospects. Research firms have issued varying recommendations for its stock price moving forward, while Paychex has continued to maintain stability and deliver consistent results as evident from its recent earnings report. With a strong dividend payout ratio and favorable market performance, Paychex appears poised for continued success in its industry.