111.46 USD
+3 (+2.77%)
111.46 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to PAYX. PAYX was compared to 87 industry peers in the Professional Services industry. While PAYX has a great profitability rating, there are some minor concerns on its financial health. PAYX has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
PAYX had positive earnings in the past year.
In the past year PAYX had a positive cash flow from operations.
In the past 5 years PAYX has always been profitable.
Each year in the past 5 years PAYX had a positive operating cash flow.
1.2 Ratios
The Return On Assets of PAYX (9.68%) is better than 78.16% of its industry peers.
The Return On Equity of PAYX (40.64%) is better than 89.66% of its industry peers.
PAYX has a Return On Invested Capital of 18.73%. This is amongst the best in the industry. PAYX outperforms 87.36% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PAYX is significantly above the industry average of 22.56%.
The 3 year average ROIC (28.05%) for PAYX is well above the current ROIC(18.73%). The reason for the recent decline needs to be investigated.
| 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's Profit Margin of 27.86% is amongst the best of the industry. PAYX outperforms 96.55% of its industry peers.
PAYX's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 40.53%, PAYX belongs to the top of the industry, outperforming 98.85% of the companies in the same industry.
In the last couple of years the Operating Margin of PAYX has grown nicely.
Looking at the Gross Margin, with a value of 90.88%, PAYX belongs to the top of the industry, outperforming 97.70% of the companies in the same industry.
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
PAYX has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for PAYX remains at a similar level compared to 1 year ago.
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 2.97 indicates that PAYX is not a great score, but indicates only limited risk for bankruptcy at the moment.
PAYX has a Altman-Z score (2.97) which is in line with 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 64.37% 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 73.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.15 | ||
| Debt/FCF | 2.72 | ||
| Altman-Z | 2.97 |
ROIC/WACC2.28
WACC8.22%
2.3 Liquidity
A Current Ratio of 1.27 indicates that PAYX should not have too much problems paying its short term obligations.
With a Current ratio value of 1.27, PAYX perfoms like the industry average, outperforming 40.23% of the companies in the same industry.
A Quick Ratio of 1.27 indicates that PAYX should not have too much problems paying its short term obligations.
PAYX has a Quick ratio (1.27) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.27 | ||
| Quick Ratio | 1.27 |
3. Growth
3.1 Past
PAYX shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.33%.
PAYX shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.74% yearly.
PAYX shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.08%.
The Revenue has been growing slightly by 6.64% on average over the past years.
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
PAYX is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.20% yearly.
The Revenue is expected to grow by 8.19% on average over the next years. This is quite good.
EPS Next Y12.04%
EPS Next 2Y9.87%
EPS Next 3Y8.62%
EPS Next 5Y8.2%
Revenue Next Year17.42%
Revenue Next 2Y11.53%
Revenue Next 3Y9.66%
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
Based on the Price/Earnings ratio of 22.12, the valuation of PAYX can be described as rather expensive.
The rest of the industry has a similar Price/Earnings ratio as PAYX.
Compared to an average S&P500 Price/Earnings ratio of 25.45, PAYX is valued at the same level.
PAYX is valuated rather expensively with a Price/Forward Earnings ratio of 18.54.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PAYX is on the same level as its industry peers.
PAYX's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 34.46.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.12 | ||
| Fwd PE | 18.54 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as PAYX.
PAYX's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. PAYX is cheaper than 65.52% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.93 | ||
| EV/EBITDA | 15.77 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of PAYX may justify a higher PE ratio.
PEG (NY)1.84
PEG (5Y)2.06
EPS Next 2Y9.87%
EPS Next 3Y8.62%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.86%, PAYX has a reasonable but not impressive dividend return.
In the last 3 months the price of PAYX has falen by -20.84%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 4.28, PAYX pays a better dividend. On top of this PAYX pays more dividend than 90.80% 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 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.86% |
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 2Y9.87%
EPS Next 3Y8.62%
111.46
+3 (+2.77%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners81.52%
Inst Owner Change-1.48%
Ins Owners10.57%
Ins Owner Change-1.99%
Market Cap40.11B
Revenue(TTM)5.79B
Net Income(TTM)1.61B
Analysts53.91
Price Target137.95 (23.77%)
Short Float %4.59%
Short Ratio4.76
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.86% |
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)-5.16%
PT rev (3m)-9.72%
EPS NQ rev (1m)-0.81%
EPS NQ rev (3m)-2.99%
EPS NY rev (1m)0.3%
EPS NY rev (3m)0.27%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)-0.37%
Revenue NY rev (1m)-0.1%
Revenue NY rev (3m)-0.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.12 | ||
| Fwd PE | 18.54 | ||
| P/S | 6.92 | ||
| P/FCF | 21.93 | ||
| P/OCF | 19.35 | ||
| P/B | 10.1 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.77 |
EPS(TTM)5.04
EY4.52%
EPS(NY)6.01
Fwd EY5.39%
FCF(TTM)5.08
FCFY4.56%
OCF(TTM)5.76
OCFY5.17%
SpS16.1
BVpS11.03
TBVpS-6.78
PEG (NY)1.84
PEG (5Y)2.06
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 | 2.97 |
F-Score5
WACC8.22%
ROIC/WACC2.28
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 Y12.04%
EPS Next 2Y9.87%
EPS Next 3Y8.62%
EPS Next 5Y8.2%
Revenue 1Y (TTM)9.08%
Revenue growth 3Y6.51%
Revenue growth 5Y6.64%
Sales Q2Q%16.8%
Revenue Next Year17.42%
Revenue Next 2Y11.53%
Revenue Next 3Y9.66%
Revenue Next 5Y8.19%
EBIT growth 1Y5.58%
EBIT growth 3Y8.18%
EBIT growth 5Y9.79%
EBIT Next Year30.45%
EBIT Next 3Y14.94%
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 4 / 10 to PAYCHEX INC (PAYX). This can be considered as Fairly Valued.
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 4 / 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%.