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Paychex raises dividend by 10%, marking continued payouts

EditorEmilio Ghigini
Published 05/01/2024, 09:06 AM

ROCHESTER, N.Y. - Paychex, Inc. (NASDAQ:PAYX), a prominent provider of human capital management solutions, has announced an increase in its quarterly dividend. The Board of Directors has approved a dividend of $0.98 per share, which is a 10% hike from the previous $0.89 per share. This increased dividend is scheduled for payment on May 30, 2024, to shareholders on record as of May 10, 2024.

The decision to boost the dividend reflects Paychex's solid financial standing and its robust generation of free cash flow, according to John Gibson, the company's president and CEO. Gibson emphasized the organization's commitment to investing in long-term growth while continuing to deliver excess capital back to its shareholders.

With a history of distributing consecutive quarterly cash dividends since 1988, Paychex anticipates returning approximately $1.3 billion to its shareholders in dividends for the fiscal year ending May 31, 2024. This move underscores the company's consistent approach to shareholder returns.

Paychex, headquartered in Rochester, New York, is a leader in the human capital management industry. It offers comprehensive technology and advisory services in human resources, employee benefits, insurance, and payroll.

The company supports around 740,000 customers across the United States and Europe, and is responsible for paying one out of every twelve American private sector employees. Paychex employs over 16,000 people who are dedicated to aiding business success and fostering vibrant communities.

This increase in dividend is based on a press release statement by Paychex, Inc. and showcases the company's stable financial performance and dedication to providing value to its shareholders.

InvestingPro Insights

Paychex, Inc. (NASDAQ:PAYX) has recently made headlines with its dividend increase, signaling confidence in its financial health and commitment to shareholder returns. As investors consider the implications of this move, several key metrics and InvestingPro Tips can provide a deeper understanding of the company's current standing.

InvestingPro Data shows that Paychex holds a market capitalization of 42.77 billion USD, with a Price/Earnings (P/E) Ratio of 25.87, reflecting investor expectations of future earnings. The company's revenue growth over the last twelve months as of Q3 2024 stands at 5.91%, indicating a steady increase in its top-line financial performance. Furthermore, Paychex boasts an impressive gross profit margin of 71.73%, which underscores its ability to manage costs effectively and maintain profitability.

InvestingPro Tips highlight that Paychex not only holds more cash than debt, a sign of a strong balance sheet, but it has also raised its dividend for 10 consecutive years. This consistent increase in dividends is a testament to the company's ability to generate and distribute excess capital to its shareholders reliably. Additionally, Paychex has maintained dividend payments for an impressive 37 consecutive years, underscoring its commitment to long-term shareholder returns.

For investors seeking further insights and tips on Paychex, InvestingPro offers additional analyses and data points. With the use of coupon code PRONEWS24, investors can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, gaining access to an extensive list of 12 additional InvestingPro Tips that can help inform investment decisions.

As Paychex continues to navigate the human capital management industry and grow its services, these financial metrics and expert insights will be crucial for stakeholders to monitor the company's ongoing performance and strategic direction.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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