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Paychex (PAYX) Stock Analysis

This is a peer-relative look at Paychex (PAYX): its performance, risk, profitability, growth, financial strength, dividend, and valuation are each measured against its Commercial & Professional Services peers, so every number reads in context rather than in isolation.

Company Profile

Company profile fields for Paychex (PAYX)
Profile ItemPAYX
NamePaychex Inc.
Country/RegionUnited States
GICS SectorIndustrials
GICS Industry GroupCommercial & Professional Services
GICS IndustryProfessional Services
GICS Sub-IndustryHuman Resource & Employment Services
Market Capitalization39.82 billion USD
CurrencyUSD
ExchangeNasdaq
Listing DateAugust 26, 1983
Security TypeCommon Stock

Price Performance

Cumulative Growth

PAYX
GSPC
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Paychex (PAYX) vs. S&P 500 (GSPC): Growth of a $10,000 investment over the past five years. Adjusted for dividends and splits.

Trailing Returns

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Trailing total returns for Paychex (PAYX) and S&P 500 (GSPC). Returns over one year are annualized.

Calendar-Year Returns

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Calendar-year total returns for Paychex (PAYX) and S&P 500 (GSPC). Each bar is that year's total return, measured year-end to year-end.

Performance Metrics

Paychex (PAYX) metric values compared with Commercial & Professional Services industry-group medians
MetricCurrent stock: PAYXIndustry group median
Total Return (1Y)-18.91%-4.47%
Total Return (3Y, Annualized)0.05%4.12%
Total Return (5Y, Annualized)3.16%2.70%

Risk Profile

Drawdown History

PAYX
GSPC
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Paychex (PAYX) vs. S&P 500 (GSPC): Drawdown from the running peak over the past five years. Each line shows the decline from its prior peak; 0% marks a new high.

Return Distribution

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Distribution of monthly total returns for Paychex (PAYX) and S&P 500 (GSPC). Each bar is the share of months whose return fell in that 5% bucket.

Risk Metrics

Paychex (PAYX) metric values compared with Commercial & Professional Services industry-group medians
MetricCurrent stock: PAYXIndustry group median
Volatility (1Y, Annualized)26.79%39.55%
Beta (5Y)0.820.83
Max Drawdown (5Y)-44.95%-56.72%

Risk-Adjusted Performance

Risk-Return Positioning

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Each dot is a stock plotted by 1-year volatility (risk) and 1-year return. PAYX is highlighted; the dashed line is the Capital Allocation Line from the risk-free rate through the industry median — dots above it are stronger on a risk-adjusted basis.

Risk-Adjusted Metrics

Paychex (PAYX) metric values compared with Commercial & Professional Services industry-group medians
MetricCurrent stock: PAYXIndustry group median
Sharpe Ratio (1Y)-0.86-0.21
Sortino Ratio (1Y)-1.19-0.31

Profitability

ROE (TTM)

No usable ROE is available for Paychex (PAYX) this period, so the shareholder-equity return read is skipped.

PAYX

Commercial & Professional Services industry group

--

Group distribution
Max
53.04%
Q3
25.65%
Median
13.99%
Q1
2.99%
Min
-28.46%
PAYX
--
Largest peers
ADP
71.21%
RELX
70.51%
CTAS
40.71%
WM
29.94%
RSG
18.35%
WCN
13.12%
PAYX
--
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Paychex (PAYX) doesn’t report ROE this period; the box shows the Commercial & Professional Services group’s distribution and the dots its largest members.

Net Margin (TTM)

Paychex (PAYX) keeps 26.63% of revenue as net profit, putting net margin in the upper peer quartile. After operating costs, interest, and taxes, more of each sales dollar reaches shareholders than it does at most industry peers.

PAYX

Commercial & Professional Services industry group

26.63%

Group distribution
PAYX
26.63%
Max
26.63%
Q3
11.56%
Median
6.26%
Q1
1.30%
Min
-13.15%
Largest peers
PAYX
26.63%
RELX
21.53%
ADP
20.12%
CTAS
17.75%
RSG
12.99%
WM
10.99%
WCN
10.97%
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Where Paychex (PAYX) stands on net margin within its Commercial & Professional Services peer group — the box is the group’s distribution and the dots its largest members.

Operating Margin (TTM)

Paychex (PAYX) turns 38.33% of revenue into operating profit, putting operating margin in the upper peer quartile. Before financing and taxes enter the picture, the day-to-day business keeps more of each sales dollar than most industry peers.

PAYX

Commercial & Professional Services industry group

38.33%

Group distribution
PAYX
38.33%
Max
38.33%
Q3
17.67%
Median
9.37%
Q1
3.13%
Min
-4.52%
Largest peers
PAYX
38.33%
RELX
31.41%
ADP
30.18%
CTAS
23.65%
RSG
20.20%
WCN
18.75%
WM
17.52%
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Where Paychex (PAYX) stands on operating margin within its Commercial & Professional Services peer group — the box is the group’s distribution and the dots its largest members.

Profitability Metrics

Paychex (PAYX) metric values compared with Commercial & Professional Services industry-group medians
MetricCurrent stock: PAYXIndustry group median
ROE (TTM)--13.99%
ROA (TTM)--5.17%
Net Margin (TTM)26.63%6.26%
Operating Margin (TTM)38.33%9.37%
Gross Margin (TTM)67.20%36.49%

Growth

Revenue Growth

Paychex (PAYX) grew revenue 16.88%, in the upper peer quartile. The top line is expanding faster than at most industry peers, which points to share gains or stronger pricing.

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Paychex (PAYX): Revenue Growth across different time periods, set against Commercial & Professional Services industry-group medians.

EPS Growth

Paychex (PAYX) grew earnings per share 6.77%, roughly around the peer group's normal range. Bottom-line momentum looks broadly typical for the industry.

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Paychex (PAYX): EPS Growth across different time periods, set against Commercial & Professional Services industry-group medians.

Growth Metrics

Paychex (PAYX) metric values compared with Commercial & Professional Services industry-group medians
MetricCurrent stock: PAYXIndustry group median
Revenue Growth (YoY)16.88%6.05%
Revenue Growth (3Y CAGR)9.15%6.27%
EPS Growth (YoY)6.77%6.77%
EPS Growth (3Y CAGR)4.38%9.88%

Financial Strength

Current Ratio (MRQ)

Paychex (PAYX) has current ratio of 1.15, in the healthier middle range for its industry. The short-term asset cushion looks balanced relative to peers rather than stretched thin.

PAYX

Commercial & Professional Services industry group

1.15

Group distribution
Max
3.17
Q3
2.01
Median
1.48
PAYX
1.15
Q1
1.13
Min
0.45
Largest peers
CTAS
1.43
PAYX
1.15
ADP
1.04
WM
0.93
WCN
0.69
RSG
0.67
RELX
0.49
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Where Paychex (PAYX) stands on current ratio within its Commercial & Professional Services peer group — the box is the group’s distribution and the dots its largest members.

Debt / Equity (MRQ)

Paychex (PAYX) has debt-to-equity ratio of 1.24, roughly in line with the peer group’s normal leverage range. Its mix of debt and equity looks typical for the industry.

PAYX

Commercial & Professional Services industry group

1.24

Group distribution
Max
2.61
Q3
1.39
PAYX
1.24
Median
0.94
Q1
0.40
Min
0.01
Largest peers
RELX
3.04
WM
2.28
PAYX
1.24
RSG
1.18
WCN
1.17
ADP
0.69
CTAS
0.53
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Where Paychex (PAYX) stands on debt-to-equity ratio within its Commercial & Professional Services peer group — the box is the group’s distribution and the dots its largest members.

Financial Strength Metrics

Paychex (PAYX) metric values compared with Commercial & Professional Services industry-group medians
MetricCurrent stock: PAYXIndustry group median
Current Ratio (MRQ)1.151.48
Debt / Equity (MRQ)1.240.94
Net Debt / EBITDA2.172.67

Dividends

Dividend Yield (TTM)

Paychex (PAYX) pays no dividend, leaving dividend yield at 0.00% this period. Shareholders may still receive value through reinvestment or buybacks, but there is no dividend income to compare here.

PAYX

Commercial & Professional Services industry group

0.00%

Group distribution
Max
3.77%
Q3
1.82%
Median
0.44%
PAYX
0.00%
Q1
0.00%
Min
0.00%
Largest peers
ADP
2.54%
RELX
1.98%
WM
1.43%
RSG
1.11%
CTAS
0.89%
WCN
0.78%
PAYX
0.00%
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Where Paychex (PAYX) stands on dividend yield within its Commercial & Professional Services peer group — the box is the group’s distribution and the dots its largest members.

Dividend Payout Ratio (TTM)

Paychex (PAYX) has payout ratio of 90.59%, above the industry’s usual payout band. A larger share of earnings is going to dividends, so the cushion narrows if profit weakens.

PAYX

Commercial & Professional Services industry group

90.59%

Group distribution
PAYX
90.59%
Max
90.59%
Q3
36.56%
Median
16.11%
Q1
0.00%
Min
0.00%
Largest peers
PAYX
90.59%
ADP
60.45%
RELX
57.42%
WM
49.49%
CTAS
36.66%
RSG
35.22%
WCN
32.44%
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Where Paychex (PAYX) stands on payout ratio within its Commercial & Professional Services peer group — the box is the group’s distribution and the dots its largest members.

Dividend Metrics

Paychex (PAYX) metric values compared with Commercial & Professional Services industry-group medians
MetricCurrent stock: PAYXIndustry group median
Dividend Yield (TTM)0.00%0.44%
Dividend Payout Ratio (TTM)90.59%16.11%

Valuation

P/E Ratio (TTM)

Paychex (PAYX) trades at P/E ratio of 23.57, near the industry’s usual earnings multiple. The stock is not showing a clear peer discount or premium on trailing earnings.

PAYX

Commercial & Professional Services industry group

23.57

Group distribution
Max
67.06
Q3
38.84
PAYX
23.57
Median
23.07
Q1
16.03
Min
4.96
Largest peers
WCN
41.69
CTAS
41.15
WM
34.60
RSG
30.79
ADP
23.81
PAYX
23.57
RELX
23.05
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Where Paychex (PAYX) stands on P/E ratio within its Commercial & Professional Services peer group — the box is the group’s distribution and the dots its largest members.

P/S Ratio (TTM)

Paychex (PAYX) trades at 10.04 on P/S ratio, above the industry benchmark range. The stock is being valued at an unusually rich price per dollar of trailing revenue.

PAYX

Commercial & Professional Services industry group

10.04

Group distribution
PAYX
10.04
Max
7.33
Q3
3.42
Median
1.37
Q1
0.74
Min
0.13
Largest peers
PAYX
10.04
CTAS
7.12
RELX
5.96
ADP
4.56
WCN
4.45
RSG
3.96
WM
3.68
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Where Paychex (PAYX) stands on P/S ratio within its Commercial & Professional Services peer group — the box is the group’s distribution and the dots its largest members.

P/B Ratio (MRQ)

Paychex (PAYX) trades at 10.66 on P/B ratio, in the higher book-value quartile. The market is paying a premium to book, so stronger ROE, cleaner assets, or a better growth profile need to justify it.

PAYX

Commercial & Professional Services industry group

10.66

Group distribution
Max
10.74
PAYX
10.66
Q3
5.92
Median
3.25
Q1
1.95
Min
-2.86
Largest peers
RELX
75.12
CTAS
15.60
ADP
15.53
PAYX
10.66
WM
9.36
RSG
5.52
WCN
5.22
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Where Paychex (PAYX) stands on P/B ratio within its Commercial & Professional Services peer group — the box is the group’s distribution and the dots its largest members.

Valuation Metrics

Paychex (PAYX) metric values compared with Commercial & Professional Services industry-group medians
MetricCurrent stock: PAYXIndustry group median
P/E Ratio (TTM)23.5723.07
P/S Ratio (TTM)10.041.37
P/B Ratio (MRQ)10.663.25
Free Cash Flow Yield (TTM)--5.04%