PAYCHEX INC (PAYX) Stock Fundamental Analysis
USA - NASDAQ:PAYX - US7043261079 - Common Stock
128.59 USD
+1.17 (+0.92%)
128.59 USD
0 (0%)
PAYX gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 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
PAYX had positive earnings in the past year.
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
PAYX has a Return On Assets of 9.68%. This is in the better half of the industry: PAYX outperforms 79.27% of its industry peers.
PAYX's Return On Equity of 40.64% is amongst the best of the industry. PAYX outperforms 91.46% of its industry peers.
The Return On Invested Capital of PAYX (18.73%) is better than 87.80% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PAYX is significantly above the industry average of 13.40%.
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 96.34% of its industry peers.
In the last couple of years the Profit Margin of PAYX has grown nicely.
The Operating Margin of PAYX (40.53%) is better than 98.78% of its industry peers.
PAYX's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 90.88%, PAYX belongs to the best of the industry, outperforming 97.56% of the companies in the same industry.
PAYX's Gross Margin has been stable in the last couple of years.
| 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.
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.
PAYX has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.29 indicates that PAYX is not in any danger for bankruptcy at the moment.
The Altman-Z score of PAYX (3.29) is comparable to the rest of the industry.
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.
Looking at the Debt to FCF ratio, with a value of 2.72, PAYX is in the better half of the industry, outperforming 64.63% of the companies in the same industry.
PAYX has a Debt/Equity ratio of 1.15. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.15, PAYX is not doing good in the industry: 74.39% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.15 | ||
| Debt/FCF | 2.72 | ||
| Altman-Z | 3.29 |
ROIC/WACC2.27
WACC8.24%
2.3 Liquidity
PAYX has a Current 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 Current ratio of PAYX (1.27) is comparable to the rest of the 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.
With a Quick ratio value of 1.27, PAYX perfoms like the industry average, outperforming 40.24% of the companies in the same 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.
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 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
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 Y11.71%
EPS Next 2Y9.96%
EPS Next 3Y8.78%
EPS Next 5Y8.2%
Revenue Next Year17.54%
Revenue Next 2Y11.66%
Revenue Next 3Y9.68%
Revenue Next 5Y8.19%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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 25.51 indicates a quite expensive valuation of PAYX.
PAYX's Price/Earnings ratio is in line with the industry average.
PAYX's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.34.
With a Price/Forward Earnings ratio of 21.36, PAYX is valued on the expensive side.
PAYX's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 22.86. PAYX is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.51 | ||
| Fwd PE | 21.36 |
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 is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.28 | ||
| EV/EBITDA | 18.36 |
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)2.18
PEG (5Y)2.38
EPS Next 2Y9.96%
EPS Next 3Y8.78%
5. Dividend
5.1 Amount
PAYX has a Yearly Dividend Yield of 3.45%.
PAYX's Dividend Yield is rather good when compared to the industry average which is at 3.89. PAYX pays more dividend than 91.46% of the companies in the same industry.
PAYX's Dividend Yield is a higher than the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.45% |
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
PAYX pays out 91.97% 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.
DP91.97%
EPS Next 2Y9.96%
EPS Next 3Y8.78%
128.59
+1.17 (+0.92%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners81.52%
Inst Owner Change0.17%
Ins Owners10.57%
Ins Owner Change0.35%
Market Cap46.24B
Analysts54.29
Price Target145.45 (13.11%)
Short Float %4.09%
Short Ratio5.42
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.45% |
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)-3.03%
PT rev (3m)-5.58%
EPS NQ rev (1m)-0.59%
EPS NQ rev (3m)-1.68%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)-0.02%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)-0.56%
Revenue NY rev (1m)-0.12%
Revenue NY rev (3m)-0.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.51 | ||
| Fwd PE | 21.36 | ||
| P/S | 7.98 | ||
| P/FCF | 25.28 | ||
| P/OCF | 22.3 | ||
| P/B | 11.65 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.36 |
EPS(TTM)5.04
EY3.92%
EPS(NY)6.02
Fwd EY4.68%
FCF(TTM)5.09
FCFY3.96%
OCF(TTM)5.77
OCFY4.48%
SpS16.11
BVpS11.04
TBVpS-6.78
PEG (NY)2.18
PEG (5Y)2.38
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%
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-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 | 3.29 |
F-Score5
WACC8.24%
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 Y11.71%
EPS Next 2Y9.96%
EPS Next 3Y8.78%
EPS Next 5Y8.2%
Revenue 1Y (TTM)9.08%
Revenue growth 3Y6.51%
Revenue growth 5Y6.64%
Sales Q2Q%16.8%
Revenue Next Year17.54%
Revenue Next 2Y11.66%
Revenue Next 3Y9.68%
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%