What Paychex's Earnings Mean for Mutual Fund Investors (PAYX)

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What Paychex's Earnings Mean for Mutual Fund Investors (PAYX)

Shauna O'Brien

|

Paychex logo in blue
Paychex (PAYX) released its second quarter financial results before the opening bell on Friday. Here’s what the results mean for mutual fund investors.

Inside the Results

Earnings

Earnings came in at $173 million, or 47 cents per share, up from $157.8 million, or 43 cents per share, last year. Analysts expected to see 47 cents per share in earnings.

Revenue
Revenue rose to $676.3 million from $616.4 million a year ago. Analysts expected to see revenue of $672.61 million.

Attractive Dividend Yield, but Payout Ratio Is High

The stock’s valuation is currently very expensive at 25x 2015 EPS estimates, so some fund managers may not want to add to their positions at the stock’s current level. Although the stock is expensive, it does offer an attractive dividend yield, which is about 3%. While this may be a good pick for income-focused investors, the stock’s payout ratio of 82% may mean that the company has little room for dividend growth.

Mutual Funds to Watch

The mutual funds below may be a good option for investors seeking exposure to PAYX. The three funds listed currently hold the largest stakes in the company.
Symbol Mutual Fund Stake
FDSAX SunAmerica Focused Dividend Strategy 3.51%
Liquid error: internal Vanguard Total Stock Mkt Idx 2.80%
FNKLX Fidelity Series Equity-Income 2.28%

The Bottom Line

The funds listed above allow investors to gain exposure to a wide range of holdings. Investors interested in Paychex may also be interested in Trinet (TNET).

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Paychex logo in blue

What Paychex's Earnings Mean for Mutual Fund Investors (PAYX)

Shauna O'Brien

|

Paychex (PAYX) released its second quarter financial results before the opening bell on Friday. Here’s what the results mean for mutual fund investors.

Inside the Results

Earnings

Earnings came in at $173 million, or 47 cents per share, up from $157.8 million, or 43 cents per share, last year. Analysts expected to see 47 cents per share in earnings.

Revenue
Revenue rose to $676.3 million from $616.4 million a year ago. Analysts expected to see revenue of $672.61 million.

Attractive Dividend Yield, but Payout Ratio Is High

The stock’s valuation is currently very expensive at 25x 2015 EPS estimates, so some fund managers may not want to add to their positions at the stock’s current level. Although the stock is expensive, it does offer an attractive dividend yield, which is about 3%. While this may be a good pick for income-focused investors, the stock’s payout ratio of 82% may mean that the company has little room for dividend growth.

Mutual Funds to Watch

The mutual funds below may be a good option for investors seeking exposure to PAYX. The three funds listed currently hold the largest stakes in the company.
Symbol Mutual Fund Stake
FDSAX SunAmerica Focused Dividend Strategy 3.51%
Liquid error: internal Vanguard Total Stock Mkt Idx 2.80%
FNKLX Fidelity Series Equity-Income 2.28%

The Bottom Line

The funds listed above allow investors to gain exposure to a wide range of holdings. Investors interested in Paychex may also be interested in Trinet (TNET).

Sign up for Advisor Access

Receive email updates about best performers, news, CE accredited webcasts and more.

Popular Articles

Download our free report

Find out why $30 trillon is invested in mutual funds.

Why 30 trillion is invested in mutual funds book

Why 30 trillion is invested in mutual funds book

Download our free report

Find out why $30 trillon is invested in mutual funds.

Why 30 trillion is invested in mutual funds book

Download our free report

Find out why $30 trillon is invested in mutual funds.

Read Next

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