PAYCHEX INC (PAYX)
US7043261079 - Common Stock
Overall PAYX gets a fundamental rating of 6 out of 10. We evaluated PAYX against 81 industry peers in the Professional Services industry. PAYX gets an excellent profitability rating and is at the same time showing great financial health properties. PAYX does not seem to be growing, but still is valued expensively.
1. Profitability
1.1 Basic Checks
PAYX had positive earnings in the past year.
PAYX had a positive operating cash flow in the past year.
In the past 5 years PAYX has always been profitable.
In the past 5 years PAYX always reported a positive cash flow from operatings.
1.2 Ratios
PAYX has a better Return On Assets (16.19%) than 93.51% of its industry peers.
PAYX's Return On Equity of 44.11% is amongst the best of the industry. PAYX outperforms 88.31% of its industry peers.
Looking at the Return On Invested Capital, with a value of 32.78%, PAYX belongs to the top of the industry, outperforming 97.40% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for PAYX is significantly above the industry average of 17.86%.
The last Return On Invested Capital (32.78%) for PAYX is above the 3 year average (32.56%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.19% | ||
| ROE | 44.11% | ||
| ROIC | 32.78% |
ROA(3y)15.17%
ROA(5y)14.05%
ROE(3y)44.73%
ROE(5y)42.18%
ROIC(3y)32.56%
ROIC(5y)30.21%
1.3 Margins
The Profit Margin of PAYX (31.98%) is better than 96.10% of its industry peers.
In the last couple of years the Profit Margin of PAYX has grown nicely.
PAYX has a Operating Margin of 41.88%. This is amongst the best in the industry. PAYX outperforms 98.70% of its industry peers.
PAYX's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 41.88% | ||
| PM (TTM) | 31.98% | ||
| GM | N/A |
OM growth 3Y4.45%
OM growth 5Y2.9%
PM growth 3Y5.79%
PM growth 5Y3.15%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
PAYX has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, PAYX has less shares outstanding
Compared to 5 years ago, PAYX has more shares outstanding
PAYX has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 6.26 indicates that PAYX is not in any danger for bankruptcy at the moment.
PAYX has a Altman-Z score of 6.26. This is amongst the best in the industry. PAYX outperforms 88.31% of its industry peers.
The Debt to FCF ratio of PAYX is 0.51, which is an excellent value as it means it would take PAYX, only 0.51 years of fcf income to pay off all of its debts.
PAYX's Debt to FCF ratio of 0.51 is amongst the best of the industry. PAYX outperforms 81.82% of its industry peers.
PAYX has a Debt/Equity ratio of 0.21. This is a healthy value indicating a solid balance between debt and equity.
PAYX has a Debt to Equity ratio (0.21) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.21 | ||
| Debt/FCF | 0.51 | ||
| Altman-Z | 6.26 |
ROIC/WACC3.5
WACC9.37%
2.3 Liquidity
PAYX has a Current Ratio of 1.38. This is a normal value and indicates that PAYX is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of PAYX (1.38) is comparable to the rest of the industry.
A Quick Ratio of 1.38 indicates that PAYX should not have too much problems paying its short term obligations.
PAYX has a Quick ratio (1.38) which is in line with its industry peers.
The current and quick ratio evaluation for PAYX is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.38 | ||
| Quick Ratio | 1.38 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.14% 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 10.69% on average per year.
The Revenue has been growing slightly by 5.42% in the past year.
Measured over the past years, PAYX shows a small growth in Revenue. The Revenue has been growing by 6.95% on average per year.
EPS 1Y (TTM)7.14%
EPS 3Y15.79%
EPS 5Y10.69%
EPS Q2Q%5.56%
Revenue 1Y (TTM)5.42%
Revenue growth 3Y9.17%
Revenue growth 5Y6.95%
Sales Q2Q%4.69%
3.2 Future
Based on estimates for the next years, PAYX will show a small growth in Earnings Per Share. The EPS will grow by 7.10% on average per year.
PAYX is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.96% yearly.
EPS Next Y7.78%
EPS Next 2Y6.93%
EPS Next 3Y6.67%
EPS Next 5Y7.1%
Revenue Next Year4.63%
Revenue Next 2Y5.05%
Revenue Next 3Y5.28%
Revenue Next 5Y4.96%
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 decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 29.07 indicates a quite expensive valuation of PAYX.
PAYX's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 27.20. PAYX is around the same levels.
The Price/Forward Earnings ratio is 25.86, which means the current valuation is very expensive for PAYX.
PAYX's Price/Forward Earnings is on the same level as the industry average.
PAYX's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 23.73.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.07 | ||
| Fwd PE | 25.86 |
4.2 Price Multiples
PAYX's Enterprise Value to EBITDA ratio is in line with the industry average.
PAYX's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.52 | ||
| EV/EBITDA | 20.63 |
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.
The excellent profitability rating of PAYX may justify a higher PE ratio.
PEG (NY)3.73
PEG (5Y)2.72
EPS Next 2Y6.93%
EPS Next 3Y6.67%
5. Dividend
5.1 Amount
PAYX has a Yearly Dividend Yield of 2.84%. Purely for dividend investing, there may be better candidates out there.
PAYX's Dividend Yield is rather good when compared to the industry average which is at 1.85. PAYX pays more dividend than 94.81% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, PAYX pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.84% |
5.2 History
On average, the dividend of PAYX grows each year by 9.63%, which is quite nice.
PAYX has been paying a dividend for at least 10 years, so it has a reliable track record.
PAYX has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)9.63%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
PAYX pays out 79.29% of its income as dividend. This is not a sustainable payout ratio.
The dividend of PAYX is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP79.29%
EPS Next 2Y6.93%
EPS Next 3Y6.67%
PAYCHEX INC
NASDAQ:PAYX (12/20/2024, 8:00:02 PM)
After market: 139.54 0 (0%)139.54
+1.73 (+1.26%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners79.95%
Inst Owner Change1.97%
Ins Owners10.74%
Ins Owner Change-1.02%
Market Cap50.22B
Analysts54.17
Price Target137.16 (-1.71%)
Short Float %5.39%
Short Ratio10.86
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.84% |
Dividend Growth(5Y)9.63%
DP79.29%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.14%
Min EPS beat(2)-0.41%
Max EPS beat(2)0.13%
EPS beat(4)1
Avg EPS beat(4)-0.69%
Min EPS beat(4)-1.37%
Max EPS beat(4)0.13%
EPS beat(8)3
Avg EPS beat(8)-0.15%
EPS beat(12)6
Avg EPS beat(12)1.86%
EPS beat(16)10
Avg EPS beat(16)2.93%
Revenue beat(2)0
Avg Revenue beat(2)-1.89%
Min Revenue beat(2)-2.03%
Max Revenue beat(2)-1.75%
Revenue beat(4)0
Avg Revenue beat(4)-2.46%
Min Revenue beat(4)-3.21%
Max Revenue beat(4)-1.75%
Revenue beat(8)0
Avg Revenue beat(8)-1.97%
Revenue beat(12)3
Avg Revenue beat(12)-0.84%
Revenue beat(16)6
Avg Revenue beat(16)-0.37%
PT rev (1m)0.7%
PT rev (3m)11.29%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.35%
EPS NY rev (1m)0.03%
EPS NY rev (3m)0.23%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.3%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)0.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.07 | ||
| Fwd PE | 25.86 | ||
| P/S | 9.46 | ||
| P/FCF | 31.52 | ||
| P/OCF | 28.09 | ||
| P/B | 13.04 | ||
| P/tB | 28.25 | ||
| EV/EBITDA | 20.63 |
EPS(TTM)4.8
EY3.44%
EPS(NY)5.4
Fwd EY3.87%
FCF(TTM)4.43
FCFY3.17%
OCF(TTM)4.97
OCFY3.56%
SpS14.76
BVpS10.7
TBVpS4.94
PEG (NY)3.73
PEG (5Y)2.72
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.19% | ||
| ROE | 44.11% | ||
| ROCE | 43.22% | ||
| ROIC | 32.78% | ||
| ROICexc | 46.18% | ||
| ROICexgc | 106.24% | ||
| OM | 41.88% | ||
| PM (TTM) | 31.98% | ||
| GM | N/A | ||
| FCFM | 30% |
ROA(3y)15.17%
ROA(5y)14.05%
ROE(3y)44.73%
ROE(5y)42.18%
ROIC(3y)32.56%
ROIC(5y)30.21%
ROICexc(3y)46.81%
ROICexc(5y)42%
ROICexgc(3y)125.26%
ROICexgc(5y)115.32%
ROCE(3y)42.88%
ROCE(5y)39.78%
ROICexcg growth 3Y4.58%
ROICexcg growth 5Y-0.02%
ROICexc growth 3Y10.47%
ROICexc growth 5Y6.99%
OM growth 3Y4.45%
OM growth 5Y2.9%
PM growth 3Y5.79%
PM growth 5Y3.15%
GM growth 3YN/A
GM growth 5YN/A
F-Score7
Asset Turnover0.51
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.21 | ||
| Debt/FCF | 0.51 | ||
| Debt/EBITDA | 0.34 | ||
| Cap/Depr | 111.59% | ||
| Cap/Sales | 3.66% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 74.55% | ||
| Profit Quality | 93.81% | ||
| Current Ratio | 1.38 | ||
| Quick Ratio | 1.38 | ||
| Altman-Z | 6.26 |
F-Score7
WACC9.37%
ROIC/WACC3.5
Cap/Depr(3y)90.01%
Cap/Depr(5y)79.9%
Cap/Sales(3y)3.27%
Cap/Sales(5y)3.24%
Profit Quality(3y)99.34%
Profit Quality(5y)104.08%
High Growth Momentum
Growth
EPS 1Y (TTM)7.14%
EPS 3Y15.79%
EPS 5Y10.69%
EPS Q2Q%5.56%
EPS Next Y7.78%
EPS Next 2Y6.93%
EPS Next 3Y6.67%
EPS Next 5Y7.1%
Revenue 1Y (TTM)5.42%
Revenue growth 3Y9.17%
Revenue growth 5Y6.95%
Sales Q2Q%4.69%
Revenue Next Year4.63%
Revenue Next 2Y5.05%
Revenue Next 3Y5.28%
Revenue Next 5Y4.96%
EBIT growth 1Y7.24%
EBIT growth 3Y14.03%
EBIT growth 5Y10.05%
EBIT Next Year14.01%
EBIT Next 3Y8.93%
EBIT Next 5Y8.12%
FCF growth 1Y19.23%
FCF growth 3Y14.49%
FCF growth 5Y8.35%
OCF growth 1Y20.47%
OCF growth 3Y14.62%
OCF growth 5Y8.34%