PAYCHEX INC (PAYX) Stock Fundamental Analysis
USA - NASDAQ:PAYX - US7043261079 - Common Stock
132.46 USD
+0.84 (+0.64%)
132.46 USD
0 (0%)
Taking everything into account, PAYX scores 6 out of 10 in our fundamental rating. PAYX was compared to 82 industry peers in the Professional Services industry. While PAYX belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. PAYX is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year PAYX was profitable.
In the past year PAYX had a positive cash flow from operations.
In the past 5 years PAYX has always been profitable.
PAYX had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
PAYX's Return On Assets of 10.01% is amongst the best of the industry. PAYX outperforms 80.49% of its industry peers.
PAYX has a Return On Equity of 40.15%. This is amongst the best in the industry. PAYX outperforms 90.24% of its industry peers.
With an excellent Return On Invested Capital value of 18.44%, PAYX belongs to the best of the industry, outperforming 87.80% of the companies in the same industry.
PAYX had an Average Return On Invested Capital over the past 3 years of 28.05%. This is significantly above the industry average of 12.76%.
The last Return On Invested Capital (18.44%) for PAYX is well below the 3 year average (28.05%), which needs to be investigated, but indicates that PAYX had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.01% | ||
| ROE | 40.15% | ||
| ROIC | 18.44% |
ROA(3y)13.68%
ROA(5y)13.48%
ROE(3y)43.07%
ROE(5y)42.31%
ROIC(3y)28.05%
ROIC(5y)28.53%
1.3 Margins
The Profit Margin of PAYX (29.74%) is better than 96.34% of its industry peers.
PAYX's Profit Margin has improved in the last couple of years.
PAYX has a Operating Margin of 41.81%. This is amongst the best in the industry. PAYX outperforms 98.78% of its industry peers.
In the last couple of years the Operating Margin of PAYX has grown nicely.
PAYX has a Gross Margin of 90.67%. This is amongst the best in the industry. PAYX outperforms 97.56% of its industry peers.
In the last couple of years the Gross Margin of PAYX has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 41.81% | ||
| PM (TTM) | 29.74% | ||
| GM | 90.67% |
OM growth 3Y1.57%
OM growth 5Y2.95%
PM growth 3Y-0.51%
PM growth 5Y1.82%
GM growth 3Y-0.99%
GM growth 5Y-0.7%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), PAYX is creating value.
PAYX has about the same amout of shares outstanding than it did 1 year ago.
PAYX has more shares outstanding than it did 5 years ago.
The debt/assets ratio for PAYX is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.42 indicates that PAYX is not in any danger for bankruptcy at the moment.
PAYX has a better Altman-Z score (3.42) than 62.20% of its industry peers.
The Debt to FCF ratio of PAYX is 2.96, which is a good value as it means it would take PAYX, 2.96 years of fcf income to pay off all of its debts.
PAYX has a better Debt to FCF ratio (2.96) than 63.41% of its industry peers.
A Debt/Equity ratio of 1.11 is on the high side and indicates that PAYX has dependencies on debt financing.
The Debt to Equity ratio of PAYX (1.11) is worse than 71.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.11 | ||
| Debt/FCF | 2.96 | ||
| Altman-Z | 3.42 |
ROIC/WACC2.24
WACC8.24%
2.3 Liquidity
A Current Ratio of 1.28 indicates that PAYX should not have too much problems paying its short term obligations.
With a Current ratio value of 1.28, PAYX perfoms like the industry average, outperforming 42.68% of the companies in the same industry.
A Quick Ratio of 1.28 indicates that PAYX should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.28, PAYX perfoms like the industry average, outperforming 42.68% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.28 | ||
| Quick Ratio | 1.28 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 5.51% over the past year.
Measured over the past years, PAYX shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.74% on average per year.
PAYX shows a small growth in Revenue. In the last year, the Revenue has grown by 5.56%.
Measured over the past years, PAYX shows a small growth in Revenue. The Revenue has been growing by 6.64% on average per year.
EPS 1Y (TTM)5.51%
EPS 3Y9.82%
EPS 5Y10.74%
EPS Q2Q%6.25%
Revenue 1Y (TTM)5.56%
Revenue growth 3Y6.51%
Revenue growth 5Y6.64%
Sales Q2Q%10.21%
3.2 Future
The Earnings Per Share is expected to grow by 8.94% on average over the next years. This is quite good.
The Revenue is expected to grow by 9.05% on average over the next years. This is quite good.
EPS Next Y11.72%
EPS Next 2Y9.95%
EPS Next 3Y9.63%
EPS Next 5Y8.94%
Revenue Next Year17.68%
Revenue Next 2Y11.9%
Revenue Next 3Y9.57%
Revenue Next 5Y9.05%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 26.60 indicates a quite expensive valuation of PAYX.
PAYX's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 27.20. PAYX is around the same levels.
Based on the Price/Forward Earnings ratio of 23.81, the valuation of PAYX can be described as rather expensive.
PAYX's Price/Forward Earnings ratio is in line with the industry average.
PAYX is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.70, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.6 | ||
| Fwd PE | 23.81 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PAYX is on the same level as its industry peers.
PAYX's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.37 | ||
| EV/EBITDA | 19.92 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates PAYX does not grow enough to justify the current Price/Earnings ratio.
PAYX has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.27
PEG (5Y)2.48
EPS Next 2Y9.95%
EPS Next 3Y9.63%
5. Dividend
5.1 Amount
PAYX has a Yearly Dividend Yield of 3.19%.
Compared to an average industry Dividend Yield of 2.07, PAYX pays a better dividend. On top of this PAYX pays more dividend than 92.68% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, PAYX pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.19% |
5.2 History
The dividend of PAYX is nicely growing with an annual growth rate of 10.17%!
PAYX has paid a dividend for at least 10 years, which is a reliable track record.
PAYX has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)10.17%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
87.40% of the earnings are spent on dividend by PAYX. This is not a sustainable payout ratio.
PAYX's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP87.4%
EPS Next 2Y9.95%
EPS Next 3Y9.63%
132.46
+0.84 (+0.64%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners81.69%
Inst Owner Change-1.59%
Ins Owners10.59%
Ins Owner Change0.39%
Market Cap47.63B
Analysts54.29
Price Target149.16 (12.61%)
Short Float %3.94%
Short Ratio6.04
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.19% |
Yearly Dividend4.02
Dividend Growth(5Y)10.17%
DP87.4%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.61%
Min EPS beat(2)-1.94%
Max EPS beat(2)-1.27%
EPS beat(4)0
Avg EPS beat(4)-1.05%
Min EPS beat(4)-1.94%
Max EPS beat(4)-0.41%
EPS beat(8)1
Avg EPS beat(8)-0.87%
EPS beat(12)4
Avg EPS beat(12)-0.07%
EPS beat(16)7
Avg EPS beat(16)1.71%
Revenue beat(2)0
Avg Revenue beat(2)-2.48%
Min Revenue beat(2)-2.51%
Max Revenue beat(2)-2.46%
Revenue beat(4)0
Avg Revenue beat(4)-2.09%
Min Revenue beat(4)-2.51%
Max Revenue beat(4)-1.65%
Revenue beat(8)0
Avg Revenue beat(8)-2.33%
Revenue beat(12)0
Avg Revenue beat(12)-1.91%
Revenue beat(16)4
Avg Revenue beat(16)-0.93%
PT rev (1m)-2.38%
PT rev (3m)-1.21%
EPS NQ rev (1m)-0.72%
EPS NQ rev (3m)-2.52%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)3.03%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)3.22%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)7.87%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.6 | ||
| Fwd PE | 23.81 | ||
| P/S | 8.55 | ||
| P/FCF | 28.37 | ||
| P/OCF | 25.06 | ||
| P/B | 11.54 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.92 |
EPS(TTM)4.98
EY3.76%
EPS(NY)5.56
Fwd EY4.2%
FCF(TTM)4.67
FCFY3.53%
OCF(TTM)5.29
OCFY3.99%
SpS15.49
BVpS11.48
TBVpS-6.49
PEG (NY)2.27
PEG (5Y)2.48
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.01% | ||
| ROE | 40.15% | ||
| ROCE | 24.24% | ||
| ROIC | 18.44% | ||
| ROICexc | 22.29% | ||
| ROICexgc | 118.16% | ||
| OM | 41.81% | ||
| PM (TTM) | 29.74% | ||
| GM | 90.67% | ||
| FCFM | 30.14% |
ROA(3y)13.68%
ROA(5y)13.48%
ROE(3y)43.07%
ROE(5y)42.31%
ROIC(3y)28.05%
ROIC(5y)28.53%
ROICexc(3y)39.45%
ROICexc(5y)39.54%
ROICexgc(3y)122.07%
ROICexgc(5y)118.33%
ROCE(3y)36.92%
ROCE(5y)37.54%
ROICexcg growth 3Y-2.65%
ROICexcg growth 5Y2.68%
ROICexc growth 3Y-20.58%
ROICexc growth 5Y-8.53%
OM growth 3Y1.57%
OM growth 5Y2.95%
PM growth 3Y-0.51%
PM growth 5Y1.82%
GM growth 3Y-0.99%
GM growth 5Y-0.7%
F-Score4
Asset Turnover0.34
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.11 | ||
| Debt/FCF | 2.96 | ||
| Debt/EBITDA | 1.8 | ||
| Cap/Depr | 105.78% | ||
| Cap/Sales | 3.98% | ||
| Interest Coverage | 62.11 | ||
| Cash Conversion | 74.87% | ||
| Profit Quality | 101.33% | ||
| Current Ratio | 1.28 | ||
| Quick Ratio | 1.28 | ||
| Altman-Z | 3.42 |
F-Score4
WACC8.24%
ROIC/WACC2.24
Cap/Depr(3y)100.38%
Cap/Depr(5y)88.13%
Cap/Sales(3y)3.56%
Cap/Sales(5y)3.37%
Profit Quality(3y)100.66%
Profit Quality(5y)101.87%
High Growth Momentum
Growth
EPS 1Y (TTM)5.51%
EPS 3Y9.82%
EPS 5Y10.74%
EPS Q2Q%6.25%
EPS Next Y11.72%
EPS Next 2Y9.95%
EPS Next 3Y9.63%
EPS Next 5Y8.94%
Revenue 1Y (TTM)5.56%
Revenue growth 3Y6.51%
Revenue growth 5Y6.64%
Sales Q2Q%10.21%
Revenue Next Year17.68%
Revenue Next 2Y11.9%
Revenue Next 3Y9.57%
Revenue Next 5Y9.05%
EBIT growth 1Y5.23%
EBIT growth 3Y8.18%
EBIT growth 5Y9.79%
EBIT Next Year30.2%
EBIT Next 3Y15.54%
EBIT Next 5Y11.67%
FCF growth 1Y-1.58%
FCF growth 3Y5.13%
FCF growth 5Y5.19%
OCF growth 1Y0.17%
OCF growth 3Y6.14%
OCF growth 5Y5.7%