Paychex Hikes Dividend 43%, Announces $1B Buyback

Shares of Paychex Inc., a provider of human resource and payroll services, climbed 4.5% to $43.30 in light after-hours trading, on news the company's Board of Directors increased its quarterly divided 43% to $0.30/share (previously $0.21) and announced a $1 billion share buyback. The dividend is payable August 15, to shareholders of record August 1. "The dividend increase, combined with the stock repurchase program, reflects the Board's confidence in the ability of Paychex to continue generating superior cash returns for our shareholders. We don’t believe there's any better investment than ourselves," said Jonathan J. Judge, president and CEO of Paychex. This is the company's first share repurchase. In a press release, Paychex said the buyback "will be executed in a manner to be determined by management." Paychex gained 1.1% to $41.44 during normal trading and has traded in a range of $32.98 - $42.50 over the past year.

Sources: Press release, TheStreet.com
Commentary: Paychex Net Up 12%; Weak Guidance • Unlucky Number Seven: Sideways Performers Since 2000 Who Stand To Gain • 32 Big Dividend Payers: Buy Now, Profit Later
Stocks/ETFs to watch: Paychex Inc. (PAYX). Competitors: Administaff Inc. (ASF), Ceridian Corporation (CEN), Automatic Data Processing, Inc. (ADP)
Earnings call transcripts: Paychex F4Q07

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Comments

[kurt walter:]

Paychex is a winner. Bought at split adjusted .52 cents in 1990. Dividends raised every year. Now it will pay $1.20 per share in dividends. A nice 230% yield on original investment. ... better than any over compensated hedge fund manager can produce.

2007 Jul 13 11:27 AM