4-Star Stocks Poised to Pop: Paychex

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Based on the aggregated intelligence of 130,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, payroll and personnel services provider Paychex (Nasdaq: PAYX) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Paychex's business, and see what CAPS investors are saying about the stock right now.

Paychex facts

Headquarters (founded)	Rochester, N.Y. (1971)
Market Cap	$9.81 billion
Industry	Data Processing and Outsourced Services
TTM Revenue	$2.11 billion
Management	Founder/Chairman Thomas Golisano President/CEO Jonathan Judge
TTM Return on Equity	44.7%
Dividend Yield	4.6%
Competitors	Automatic Data Processing (Nasdaq: ADP) Administaff (NYSE: ASF)
CAPS members bullish on PAYX also bullish on	General Electric (NYSE: GE) Johnson & Johnson (NYSE: JNJ)
CAPS members bearish on PAYX also bearish on	Citigroup (NYSE: C) Amazon.com (Nasdaq: AMZN)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 929 of the 979 members who have rated Paychex -- some 95% -- believe the stock will outperform the S&P 500 going forward. These bulls include All-Stars MFBriguy and TMFBuck, both of whom are ranked in the top 6% of our community.

Two weeks ago, MFBriguy noted that Paychex is "doing all the right things during this recession, investing in their current customer base, going the extra mile to retain existing business, expanding offerings and asking for referrals to others who would benefit." Our CAPS member concludes: "[T]hey getting better and stronger during the downturn and will emerge with more market share and a great platform for growth."

In a pitch from February, TMFBuck echoes that bullish sentiment:

What a phenomenal company. This is not a macro bet. I love this company, its margins, and its moat and now the price is right. Take the dividend and wait until things turn around in the economy. They also should get a nice boost when/if interest rates finally go up as they aren't earning much on their float these days. Sure they will lose some business as unemployment climbs. It will no doubt get worse than it is today but I think that and more is baked into this price.

What do you think about Paychex, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 130,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.