Definitive Analysis
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Definitive Analysis

Financial Statements

Ticker

Industry

Sector

Paychex, Inc. (PAYX)

Company Dividend Discount ModelIndustry: Staffing & Employment ServicesSector: Industrials

Valuation Snapshot

Stable Growth$428.81 - $886.53$830.81
Multi-Stage$140.39 - $153.41$146.78
Blended Fair Value$488.80
Current Price$139.46
Upside250.49%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS10.25%10.13%4.003.633.252.762.512.462.282.041.831.68
YoY Growth--10.13%11.94%17.55%10.00%2.17%7.57%11.78%11.69%9.20%9.91%
Dividend Yield--2.87%2.77%2.66%2.24%2.19%3.21%2.80%2.79%3.21%2.76%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)1,613.70
(-) Cash Dividends Paid (M)1,484.20
(=) Cash Retained (M)129.50
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)322.74201.71121.03
Cash Retained (M)129.50129.50129.50
(-) Cash Required (M)-322.74-201.71-121.03
(=) Excess Retained (M)-193.24-72.218.47
(/) Shares Outstanding (M)362.00362.00362.00
(=) Excess Retained per Share-0.53-0.200.02
LTM Dividend per Share4.104.104.10
(+) Excess Retained per Share-0.53-0.200.02
(=) Adjusted Dividend3.573.904.12
WACC / Discount Rate6.38%6.38%6.38%
Growth Rate5.50%6.50%7.50%
Fair Value$428.81$830.81$886.53
Upside / Downside207.48%495.73%535.69%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)1,613.701,718.591,830.301,949.272,075.972,210.912,277.24
Payout Ratio91.97%91.58%91.18%90.79%90.39%90.00%92.50%
Projected Dividends (M)1,484.201,573.881,668.961,769.741,876.571,989.822,106.44

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate6.38%6.38%6.38%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)1,465.641,479.531,493.42
Year 2 PV (M)1,447.281,474.851,502.67
Year 3 PV (M)1,429.131,470.151,511.95
Year 4 PV (M)1,411.171,465.441,521.26
Year 5 PV (M)1,393.421,460.721,530.60
PV of Terminal Value (M)43,675.5145,785.0547,975.33
Equity Value (M)50,822.1453,135.7455,535.24
Shares Outstanding (M)362.00362.00362.00
Fair Value$140.39$146.78$153.41
Upside / Downside0.67%5.25%10.00%

High-Yield Dividend Screener

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