PAYCHEX INC (PAYX) Stock Fundamental Analysis
USA - NASDAQ:PAYX - US7043261079 - Common Stock
117.03 USD
-0.2 (-0.17%)
117.03 USD
0 (0%)
Overall PAYX gets a fundamental rating of 6 out of 10. We evaluated PAYX against 86 industry peers in the Professional Services industry. PAYX scores excellent on profitability, but 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.
PAYX had a positive operating cash flow in the past year.
PAYX had positive earnings in each of the past 5 years.
In the past 5 years PAYX always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 9.68%, PAYX belongs to the top of the industry, outperforming 81.40% of the companies in the same industry.
PAYX has a Return On Equity of 40.64%. This is amongst the best in the industry. PAYX outperforms 91.86% of its industry peers.
PAYX has a better Return On Invested Capital (18.73%) than 89.53% of its industry peers.
PAYX had an Average Return On Invested Capital over the past 3 years of 28.05%. This is significantly above the industry average of 13.22%.
The last Return On Invested Capital (18.73%) 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 | 9.68% | ||
| ROE | 40.64% | ||
| ROIC | 18.73% |
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
PAYX has a better Profit Margin (27.86%) than 97.67% of its industry peers.
In the last couple of years the Profit Margin of PAYX has grown nicely.
Looking at the Operating Margin, with a value of 40.53%, PAYX belongs to the top of the industry, outperforming 98.84% of the companies in the same industry.
In the last couple of years the Operating Margin of PAYX has grown nicely.
PAYX's Gross Margin of 90.88% is amongst the best of the industry. PAYX outperforms 97.67% 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 | 40.53% | ||
| PM (TTM) | 27.86% | ||
| GM | 90.88% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so PAYX is creating value.
The number of shares outstanding for PAYX remains at a similar level compared to 1 year ago.
The number of shares outstanding for PAYX has been increased compared to 5 years ago.
Compared to 1 year ago, PAYX has a worse debt to assets ratio.
2.2 Solvency
PAYX has an Altman-Z score of 3.12. This indicates that PAYX is financially healthy and has little risk of bankruptcy at the moment.
PAYX has a better Altman-Z score (3.12) than 60.47% of its industry peers.
PAYX has a debt to FCF ratio of 2.72. This is a good value and a sign of high solvency as PAYX would need 2.72 years to pay back of all of its debts.
PAYX has a Debt to FCF ratio of 2.72. This is in the better half of the industry: PAYX outperforms 65.12% of its industry peers.
A Debt/Equity ratio of 1.15 is on the high side and indicates that PAYX has dependencies on debt financing.
The Debt to Equity ratio of PAYX (1.15) is worse than 73.26% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.15 | ||
| Debt/FCF | 2.72 | ||
| Altman-Z | 3.12 |
ROIC/WACC2.27
WACC8.25%
2.3 Liquidity
A Current Ratio of 1.27 indicates that PAYX should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.27, PAYX is in line with its industry, outperforming 40.70% of the companies in the same industry.
PAYX has a Quick Ratio of 1.27. This is a normal value and indicates that PAYX is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of PAYX (1.27) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.27 | ||
| Quick Ratio | 1.27 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.33% over the past year.
PAYX shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.74% yearly.
Looking at the last year, PAYX shows a quite strong growth in Revenue. The Revenue has grown by 9.08% in the last year.
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)6.33%
EPS 3Y9.82%
EPS 5Y10.74%
EPS Q2Q%5.17%
Revenue 1Y (TTM)9.08%
Revenue growth 3Y6.51%
Revenue growth 5Y6.64%
Sales Q2Q%16.8%
3.2 Future
Based on estimates for the next years, PAYX will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.20% on average per year.
Based on estimates for the next years, PAYX will show a quite strong growth in Revenue. The Revenue will grow by 8.19% on average per year.
EPS Next Y12.16%
EPS Next 2Y9.9%
EPS Next 3Y8.64%
EPS Next 5Y8.2%
Revenue Next Year17.47%
Revenue Next 2Y11.6%
Revenue Next 3Y9.71%
Revenue Next 5Y8.19%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 23.22 indicates a rather expensive valuation of PAYX.
The rest of the industry has a similar Price/Earnings ratio as PAYX.
PAYX's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.10.
Based on the Price/Forward Earnings ratio of 19.46, 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 22.52, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.22 | ||
| Fwd PE | 19.46 |
4.2 Price Multiples
PAYX's Enterprise Value to EBITDA is on the same level as the industry average.
PAYX's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.03 | ||
| EV/EBITDA | 16.97 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PAYX has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.91
PEG (5Y)2.16
EPS Next 2Y9.9%
EPS Next 3Y8.64%
5. Dividend
5.1 Amount
PAYX has a Yearly Dividend Yield of 3.69%.
Compared to an average industry Dividend Yield of 3.98, PAYX pays a better dividend. On top of this PAYX pays more dividend than 91.86% of the companies listed in the same industry.
PAYX's Dividend Yield is rather good when compared to the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.69% |
5.2 History
The dividend of PAYX is nicely growing with an annual growth rate of 10.17%!
PAYX has been paying a dividend for at least 10 years, so it has 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
91.97% 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.
DP91.97%
EPS Next 2Y9.9%
EPS Next 3Y8.64%
117.03
-0.2 (-0.17%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners81.52%
Inst Owner Change0.08%
Ins Owners10.57%
Ins Owner Change-0.78%
Market Cap42.12B
Revenue(TTM)5.79B
Net Income(TTM)1.61B
Analysts54.29
Price Target137.95 (17.88%)
Short Float %3.98%
Short Ratio4.64
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.69% |
Yearly Dividend4.02
Dividend Growth(5Y)10.17%
DP91.97%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.39%
Min EPS beat(2)-1.94%
Max EPS beat(2)-0.85%
EPS beat(4)0
Avg EPS beat(4)-1.16%
Min EPS beat(4)-1.94%
Max EPS beat(4)-0.58%
EPS beat(8)1
Avg EPS beat(8)-0.93%
EPS beat(12)3
Avg EPS beat(12)-0.49%
EPS beat(16)6
Avg EPS beat(16)1.1%
Revenue beat(2)0
Avg Revenue beat(2)-2.18%
Min Revenue beat(2)-2.51%
Max Revenue beat(2)-1.85%
Revenue beat(4)0
Avg Revenue beat(4)-2.12%
Min Revenue beat(4)-2.51%
Max Revenue beat(4)-1.65%
Revenue beat(8)0
Avg Revenue beat(8)-2.29%
Revenue beat(12)0
Avg Revenue beat(12)-2.02%
Revenue beat(16)3
Avg Revenue beat(16)-1.16%
PT rev (1m)-2.49%
PT rev (3m)-4.65%
EPS NQ rev (1m)-1.77%
EPS NQ rev (3m)-2.86%
EPS NY rev (1m)0.4%
EPS NY rev (3m)0.38%
Revenue NQ rev (1m)0.19%
Revenue NQ rev (3m)-0.44%
Revenue NY rev (1m)-0.18%
Revenue NY rev (3m)-0.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.22 | ||
| Fwd PE | 19.46 | ||
| P/S | 7.27 | ||
| P/FCF | 23.03 | ||
| P/OCF | 20.32 | ||
| P/B | 10.61 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.97 |
EPS(TTM)5.04
EY4.31%
EPS(NY)6.01
Fwd EY5.14%
FCF(TTM)5.08
FCFY4.34%
OCF(TTM)5.76
OCFY4.92%
SpS16.1
BVpS11.03
TBVpS-6.78
PEG (NY)1.91
PEG (5Y)2.16
Graham Number35.37
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.68% | ||
| ROE | 40.64% | ||
| ROCE | 24.63% | ||
| ROIC | 18.73% | ||
| ROICexc | 22.7% | ||
| ROICexgc | 121.58% | ||
| OM | 40.53% | ||
| PM (TTM) | 27.86% | ||
| GM | 90.88% | ||
| FCFM | 31.57% |
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%
ROICexgc growth 3Y-2.65%
ROICexgc 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-Score5
Asset Turnover0.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.15 | ||
| Debt/FCF | 2.72 | ||
| Debt/EBITDA | 1.74 | ||
| Cap/Depr | 87.31% | ||
| Cap/Sales | 4.22% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 78.89% | ||
| Profit Quality | 113.34% | ||
| Current Ratio | 1.27 | ||
| Quick Ratio | 1.27 | ||
| Altman-Z | 3.12 |
F-Score5
WACC8.25%
ROIC/WACC2.27
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)6.33%
EPS 3Y9.82%
EPS 5Y10.74%
EPS Q2Q%5.17%
EPS Next Y12.16%
EPS Next 2Y9.9%
EPS Next 3Y8.64%
EPS Next 5Y8.2%
Revenue 1Y (TTM)9.08%
Revenue growth 3Y6.51%
Revenue growth 5Y6.64%
Sales Q2Q%16.8%
Revenue Next Year17.47%
Revenue Next 2Y11.6%
Revenue Next 3Y9.71%
Revenue Next 5Y8.19%
EBIT growth 1Y5.58%
EBIT growth 3Y8.18%
EBIT growth 5Y9.79%
EBIT Next Year30.45%
EBIT Next 3Y14.99%
EBIT Next 5Y10.89%
FCF growth 1Y-2.33%
FCF growth 3Y5.13%
FCF growth 5Y5.19%
OCF growth 1Y1.88%
OCF growth 3Y6.14%
OCF growth 5Y5.7%
PAYCHEX INC / PAYX FAQ
Can you provide the ChartMill fundamental rating for PAYCHEX INC?
ChartMill assigns a fundamental rating of 6 / 10 to PAYX.
What is the valuation status for PAYX stock?
ChartMill assigns a valuation rating of 3 / 10 to PAYCHEX INC (PAYX). This can be considered as Overvalued.
How profitable is PAYCHEX INC (PAYX) stock?
PAYCHEX INC (PAYX) has a profitability rating of 9 / 10.
What is the financial health of PAYCHEX INC (PAYX) stock?
The financial health rating of PAYCHEX INC (PAYX) is 5 / 10.
How sustainable is the dividend of PAYCHEX INC (PAYX) stock?
The dividend rating of PAYCHEX INC (PAYX) is 6 / 10 and the dividend payout ratio is 91.97%.