107.19 USD
0 (0%)
107.2 USD
+0.01 (+0.01%)
PAYX gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 88 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
- Looking at the Return On Assets, with a value of 9.66%, PAYX is in the better half of the industry, outperforming 78.41% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 41.13%, PAYX belongs to the top of the industry, outperforming 93.18% of the companies in the same industry.
- PAYX has a better Return On Invested Capital (19.25%) than 89.77% 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 11.85%.
- The last Return On Invested Capital (19.25%) 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 | 9.66% | ||
| ROE | 41.13% | ||
| ROIC | 19.25% |
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
- The Profit Margin of PAYX (26.45%) is better than 94.32% of its industry peers.
- In the last couple of years the Profit Margin of PAYX has grown nicely.
- PAYX has a better Operating Margin (39.76%) than 98.86% of its industry peers.
- PAYX's Operating Margin has improved in the last couple of years.
- With an excellent Gross Margin value of 91.14%, PAYX belongs to the best of the industry, outperforming 98.86% 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 | 39.76% | ||
| PM (TTM) | 26.45% | ||
| GM | 91.14% |
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.
- 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
- PAYX has an Altman-Z score of 2.98. This is not the best score and indicates that PAYX is in the grey zone with still only limited risk for bankruptcy at the moment.
- PAYX has a Altman-Z score (2.98) which is comparable to the rest of the industry.
- The Debt to FCF ratio of PAYX is 2.53, which is a good value as it means it would take PAYX, 2.53 years of fcf income to pay off all of its debts.
- PAYX has a Debt to FCF ratio of 2.53. This is in the better half of the industry: PAYX outperforms 70.45% of its industry peers.
- PAYX has a Debt/Equity ratio of 1.18. This is a high value indicating a heavy dependency on external financing.
- With a Debt to Equity ratio value of 1.18, PAYX is not doing good in the industry: 70.45% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.18 | ||
| Debt/FCF | 2.53 | ||
| Altman-Z | 2.98 |
ROIC/WACC2.31
WACC8.35%
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 40.91% 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.
- With a Quick ratio value of 1.27, PAYX perfoms like the industry average, outperforming 40.91% of the companies in the same 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 7.50%.
- The Earnings Per Share has been growing by 10.74% on average over the past years. This is quite good.
- Looking at the last year, PAYX shows a quite strong growth in Revenue. The Revenue has grown by 12.37% in the last year.
- PAYX shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.64% yearly.
EPS 1Y (TTM)7.5%
EPS 3Y9.82%
EPS 5Y10.74%
EPS Q2Q%10.53%
Revenue 1Y (TTM)12.37%
Revenue growth 3Y6.51%
Revenue growth 5Y6.64%
Sales Q2Q%18.28%
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 8.20% yearly.
EPS Next Y11.52%
EPS Next 2Y9.85%
EPS Next 3Y8.75%
EPS Next 5Y8.2%
Revenue Next Year16.92%
Revenue Next 2Y11.28%
Revenue Next 3Y9.48%
Revenue Next 5Y8.2%
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
- With a Price/Earnings ratio of 20.77, PAYX is valued on the expensive side.
- Compared to the rest of the industry, the Price/Earnings ratio of PAYX indicates a somewhat cheap valuation: PAYX is cheaper than 61.36% of the companies listed in the same industry.
- When comparing the Price/Earnings ratio of PAYX to the average of the S&P500 Index (27.32), we can say PAYX is valued slightly cheaper.
- The Price/Forward Earnings ratio is 17.84, which indicates a rather expensive current valuation of PAYX.
- PAYX's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. PAYX is cheaper than 61.36% of the companies in the same industry.
- PAYX is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.32, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.77 | ||
| Fwd PE | 17.84 |
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 a bit cheaper when compared to the industry. PAYX is cheaper than 71.59% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.66 | ||
| EV/EBITDA | 15.28 |
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.
- PAYX has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.8
PEG (5Y)1.93
EPS Next 2Y9.85%
EPS Next 3Y8.75%
5. Dividend
5.1 Amount
- PAYX has a Yearly Dividend Yield of 3.91%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 1.41, PAYX pays a better dividend. On top of this PAYX pays more dividend than 90.91% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.83, PAYX pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.91% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)10.17%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
- PAYX pays out 95.21% 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.
DP95.21%
EPS Next 2Y9.85%
EPS Next 3Y8.75%
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 of PAYCHEX INC (PAYX) stock?
ChartMill assigns a valuation rating of 4 / 10 to PAYCHEX INC (PAYX). This can be considered as Fairly Valued.
What is the profitability of PAYX stock?
PAYCHEX INC (PAYX) has a profitability rating of 9 / 10.
Can you provide the PE and PB ratios for PAYX stock?
The Price/Earnings (PE) ratio for PAYCHEX INC (PAYX) is 20.77 and the Price/Book (PB) ratio is 9.94.
How financially healthy is PAYCHEX INC?
The financial health rating of PAYCHEX INC (PAYX) is 4 / 10.