PAYCHEX INC (PAYX) Stock Fundamental Analysis
USA - NASDAQ:PAYX - US7043261079 - Common Stock
110.48 USD
-1.62 (-1.45%)
110.48 USD
0 (0%)
Taking everything into account, PAYX scores 6 out of 10 in our fundamental rating. 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 is not valued too expensively and it also shows 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.
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
PAYX has a better Return On Assets (9.68%) than 78.16% of its industry peers.
PAYX has a Return On Equity of 40.64%. This is amongst the best in the industry. PAYX outperforms 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.
PAYX had an Average Return On Invested Capital over the past 3 years of 28.05%. This 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
With an excellent Profit Margin value of 27.86%, PAYX belongs to the best of the industry, outperforming 96.55% of the companies in the same industry.
In the last couple of years the Profit Margin of PAYX has grown nicely.
PAYX's Operating Margin of 40.53% is amongst the best of the industry. PAYX outperforms 98.85% of its industry peers.
In the last couple of years the Operating Margin of PAYX has grown nicely.
With an excellent Gross Margin value of 90.88%, PAYX belongs to the best 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.
Compared to 1 year ago, PAYX has about the same amount of shares outstanding.
Compared to 5 years ago, PAYX has more shares outstanding
Compared to 1 year ago, PAYX has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.03 indicates that PAYX is not in any danger for bankruptcy at the moment.
The Altman-Z score of PAYX (3.03) is comparable to the rest of the industry.
The Debt to FCF ratio of PAYX is 2.72, which is a good value as it means it would take PAYX, 2.72 years of fcf income to pay off all of its debts.
PAYX's Debt to FCF ratio of 2.72 is fine compared to the rest of the industry. PAYX outperforms 64.37% of its industry peers.
PAYX has a Debt/Equity ratio of 1.15. This is a high value indicating a heavy dependency on external financing.
PAYX has a Debt to Equity ratio of 1.15. This is in the lower half of the industry: PAYX underperforms 73.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.15 | ||
| Debt/FCF | 2.72 | ||
| Altman-Z | 3.03 |
ROIC/WACC2.27
WACC8.25%
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.
Looking at the Current ratio, with a value of 1.27, PAYX is in line with its industry, 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 comparable to the rest of the industry.
| 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%.
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.
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.
PAYX is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.19% yearly.
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
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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
The Price/Earnings ratio is 21.92, which indicates a rather expensive current valuation of PAYX.
Compared to the rest of the industry, the Price/Earnings ratio of PAYX is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 25.56, PAYX is valued at the same level.
PAYX is valuated rather expensively with a Price/Forward Earnings ratio of 18.38.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PAYX is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of PAYX to the average of the S&P500 Index (34.62), we can say PAYX is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.92 | ||
| Fwd PE | 18.38 |
4.2 Price Multiples
PAYX's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, PAYX is valued a bit cheaper than the industry average as 64.37% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.74 | ||
| EV/EBITDA | 16.27 |
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)1.82
PEG (5Y)2.04
EPS Next 2Y9.87%
EPS Next 3Y8.62%
5. Dividend
5.1 Amount
PAYX has a Yearly Dividend Yield of 3.86%.
The stock price of PAYX dropped by -21.54% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
PAYX's Dividend Yield is rather good when compared to the industry average which is at 4.28. PAYX pays more dividend than 90.80% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.44, PAYX pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.86% |
5.2 History
On average, the dividend of PAYX grows each year by 10.17%, 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 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.
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%
110.48
-1.62 (-1.45%)
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 Cap39.76B
Revenue(TTM)5.79B
Net Income(TTM)1.61B
Analysts53.91
Price Target137.95 (24.86%)
Short Float %3.98%
Short Ratio4.64
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 | 21.92 | ||
| Fwd PE | 18.38 | ||
| P/S | 6.86 | ||
| P/FCF | 21.74 | ||
| P/OCF | 19.18 | ||
| P/B | 10.01 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.27 |
EPS(TTM)5.04
EY4.56%
EPS(NY)6.01
Fwd EY5.44%
FCF(TTM)5.08
FCFY4.6%
OCF(TTM)5.76
OCFY5.21%
SpS16.1
BVpS11.03
TBVpS-6.78
PEG (NY)1.82
PEG (5Y)2.04
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 | 3.03 |
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 Y12.04%
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 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%.