NASDAQ: PAYX
Key Data Points
While investors may be drawn to Paychex stock, however, there are a variety of things to consider before they pick up shares such as whether the stock aligns with their investing goals, evaluating the profitability of Paychex, and determining if there's the option to collect dividends.
How to buy Paychex (PAYX) stock
For investors looking to gain exposure to Paychex, there are only a few simple steps they need to take:
- Open your brokerage app: Log into your brokerage account where you handle your investments.
- Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected, and adjust your investment strategy accordingly.
Should I invest in Paychex?
One of the largest human resources stocks based on market capitalization, Paychex is at the forefront of helping businesses address their human resources needs with leading technology, such as platforms that integrate AI.
While Paychex stock doesn't have the extraordinary growth potential of advanced tech stocks, a Paychex investment is well-suited for conservative investors seeking to fortify their portfolios.
For one, the company doesn't have a balance sheet weighed down with debt. At the end of fiscal 2025, for example, Paychex had a 1.3 net debt-to-earnings before interest, taxes, depreciation, and amortization (EBITDA) ratio.
The company is also not jeopardizing its financial well-being to placate shareholders. Over the past five years, Paychex has averaged a 78.8% payout ratio according to Morningstar (MORN +1.82%), and the company consistently generates enough free cash flow to fund its dividend.
Is Paychex profitable?
While Paychex experienced a decline in profits from fiscal years 2024 to 2025, when it reported a 2% dip in diluted earnings per share (EPS) from $4.67 to $4.58, the overall arc of the company's profitability is undeniable. Consistent with growth on the top line, Paychex has reported growth at the bottom of the income statement over the past decade.
From fiscal years 2015 through 2025, Paychex has increased revenue at a 7.4% compound annual growth rate (CAGR). During the same period, Paychex has grown diluted EPS at a 9.5% CAGR.
On an adjusted diluted EPS basis, Paychex reported $4.98 in fiscal 2025, and management projects year-over-year adjusted diluted EPS growth of 8.5% to 10.5% for fiscal 2026.
Does Paychex pay a dividend?
Not only does Paychex pay a dividend, but management recognizes the dividend as the primary means of rewarding shareholders as opposed to stock buybacks. On the company's fourth-quarter 2025 conference call, Bob Schrader, the company's chief financial officer, stated, "To the extent that we have excess cash, our primary way to return that to shareholders is through dividends versus share buybacks."
From fiscal 2010, when it returned $1.24 per share to investors, to fiscal 2025, when it returned $4.02, Paychex has hiked its dividend at an 8.2% CAGR over the past 15 years.
Will Paychex stock split?
As of October 2025, Paychex had split its stock 10 times in its history, most recently in 2000 -- a 3-for-2 stock split. With many brokerages offering investors the option to buy fractional shares of stocks, companies generally have been less inclined to offer stock splits.
With shares of Paychex trading at around $127 per share as of mid-October 2025, it seems highly unlikely that the company will choose to split its stock in the near future.
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The bottom line on Paychex
While the term industrials stock may immediately summon to mind companies operating factories and heavy machinery, human resources specialist Paychex also qualifies as an industrials stock.
For those interested in portfolio diversification, Paychex is a conservative choice to balance out some of the higher risk stocks that investors may be holding. The company consistently generates both profits and free cash flow, helping to support dividend payments as well as acquisitions.
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