Thursday, July 12, 2007

Paychex Increases Dividend 87.5%

Paychex (PAYX) announced an 87.5% year over year increase in the company's quarterly dividend. The new quarterly dividend payable in the 3rd quarter of this year will be 30 cents per share versus 16 cents per share in the same quarter last year. A first for the company was the announcement of a $1 billion stock buyback.

The company has a May year end and estimated 12-month earnings beginning with the company's 3rd quarter (Feb. 2007) through 2nd quarter next year (Nov. 2008) equals $1.50. The projected payout ratio is approximately 80%. The payout ratio has trended higher from the low 60% range since 2004. PAYX has a Standard and Poor's Quality Ranking of A+ and is one of S&P's Dividend Aristocrats.

(click on chart/table for larger image)

Paychex dividend analysis table. July 12, 2007
Paychex stock chart. July 12, 2007

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