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Paychex (Paychex) Free Cash Flow per Share : $4.80 (TTM As of May. 2024)


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What is Paychex Free Cash Flow per Share?

Paychex's Free Cash Flow per Share for the three months ended in May. 2024 was $0.50. Its Free Cash Flow per Share for the trailing twelve months (TTM) ended in May. 2024 was $4.80.

During the past 12 months, the average Free Cash Flow per Share Growth Rate of Paychex was 11.10% per year. During the past 3 years, the average Free Cash Flow per Share Growth Rate was 15.00% per year. During the past 5 years, the average Free Cash Flow per Share Growth Rate was 8.40% per year. During the past 10 years, the average Free Cash Flow per Share Growth Rate was 8.30% per year. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the FCF Growth Rate using Free Cash Flow per Share data.

The historical rank and industry rank for Paychex's Free Cash Flow per Share or its related term are showing as below:

PAYX' s 3-Year FCF Growth Rate Range Over the Past 10 Years
Min: -0.8   Med: 12.75   Max: 74.3
Current: 15

During the past 13 years, Paychex's highest 3-Year average Free Cash Flow per Share Growth Rate was 74.30% per year. The lowest was -0.80% per year. And the median was 12.75% per year.

PAYX's 3-Year FCF Growth Rate is ranked better than
66.47% of 692 companies
in the Business Services industry
Industry Median: 0.35 vs PAYX: 15.00

Paychex Free Cash Flow per Share Historical Data

The historical data trend for Paychex's Free Cash Flow per Share can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Paychex Free Cash Flow per Share Chart

Paychex Annual Data
Trend May15 May16 May17 May18 May19 May20 May21 May22 May23 May24
Free Cash Flow per Share
Get a 7-Day Free Trial Premium Member Only Premium Member Only 3.64 3.15 4.01 4.32 4.80

Paychex Quarterly Data
Aug19 Nov19 Feb20 May20 Aug20 Nov20 Feb21 May21 Aug21 Nov21 Feb22 May22 Aug22 Nov22 Feb23 May23 Aug23 Nov23 Feb24 May24
Free Cash Flow per Share Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.03 1.70 0.85 1.75 0.50

Competitive Comparison of Paychex's Free Cash Flow per Share

For the Staffing & Employment Services subindustry, Paychex's Price-to-Free-Cash-Flow, along with its competitors' market caps and Price-to-Free-Cash-Flow data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Paychex's Price-to-Free-Cash-Flow Distribution in the Business Services Industry

For the Business Services industry and Industrials sector, Paychex's Price-to-Free-Cash-Flow distribution charts can be found below:

* The bar in red indicates where Paychex's Price-to-Free-Cash-Flow falls into.



Paychex Free Cash Flow per Share Calculation

Free Cashflow per Share is the amount of Free Cashflow per outstanding share of the company's stock.

Free Cash Flow is considered one of the most important parameters to measure a company's earnings power by value investors because it is not subject to estimates of Depreciation, Depletion and Amortization (DDA). However, when we look at the Free Cash Flow, we should look from a long term perspective, because any year's Free Cash Flow can be drastically affected by the spending on Property, Plant, & Equipment (PPE) of the business in that year. Over the long term, Free Cash Flow should give pretty good picture on the real earnings power of the company.

Note: GuruFocus does not calculate Free Cash Flow Per Share when Capital Expenditure is 0.

Paychex's Free Cash Flow Per Share for the fiscal year that ended in May. 2024 is calculated as

Free Cash Flow Per Share(A: May. 2024 )
=(Cash Flow from Operations+Capital Expenditure)/Shares Outstanding (Diluted Average)
=(1897.7+-161.4)/362.100
=1736.3/362.100
=4.80

Paychex's Free Cash Flow Per Share for the quarter that ended in May. 2024 is calculated as

Free Cash Flow Per Share(Q: May. 2024 )
=(Cash Flow from Operations+Capital Expenditure)/Shares Outstanding (Diluted Average)
=(221.7+-41.3)/361.800
=180.4/361.800
=0.50

Free Cash Flow per Share for the trailing twelve months (TTM) ended in May. 2024 adds up the quarterly data reported by the company within the most recent 12 months, which was $4.80

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Paychex  (NAS:PAYX) Free Cash Flow per Share Explanation

Free Cash Flow is very close to Warren Buffett's definition of Owner's Earnings, except that in Warren Buffett's Owner's Earnings, the spending for Property, Plant, and Equipment is only for maintenance (replacement), while in the Free Cash Flow calculation, the cost of new Property, Plant, and Equipment due to business expansion is also deducted. There, Free Cash Flow is more conservative than Owner's Earnings.

In Don Yacktman's calculation of forward rate of return, he uses Free Cash Flow for the calculation. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation.

This is what Yacktman said in his March 2012 interview - when the S&P 500 was at 1400:

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over seven years. The reason we use seven years is because research shows that seven years is the length of the typical business cycle.

Therefore, as of May24, Paychex's Forward Rate of Return (Yacktman) % is

Forward Rate of Return (Yacktman) % (May24)=Normalized Free Cash Flow/Price+5-Year EBITDA Growth Rate
=3.904/120.16+0.1005
=13.30 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Free Cash Flow within a report period can be affected by management's decisions of capital spending. Therefore, it is important to look at long term when it comes to Free Cash Flow.


Paychex Free Cash Flow per Share Related Terms

Thank you for viewing the detailed overview of Paychex's Free Cash Flow per Share provided by GuruFocus.com. Please click on the following links to see related term pages.


Paychex (Paychex) Business Description

Traded in Other Exchanges
Address
911 Panorama Trail South, Rochester, NY, USA, 14625-2396
Paychex is a leading provider of payroll, human capital management, and insurance solutions servicing small and midsize clients primarily in the United States. The company, established in 1979, services over 740,000 clients and pays over 1 in 12 U.S. private-sector workers. Alongside its traditional payroll services, Paychex offers HCM solutions such as benefits administration and time and attendance software, as well as human resources outsourcing and insurance agency services.
Executives
Flaschen David J S director 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Christopher C Simmons officer: VP, Controller & Treasurer 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Michael E Gioja officer: Sr. Vice President 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Efrain Rivera officer: Sr. Vice President, CFO 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Martin Mucci officer: Sr. Vice President 911 PANORAMA TRAIL S, ROCHESTER NY 14625
Joseph M Tucci director EMC CORPORATION, 176 SOUTH STREET, HOPKINTON MA 01748
Joseph M Velli director
Elizabeth Roaldsen officer: Sr. Vice President 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Karen E. Saunders-mcclendon officer: VP, Chief Human Resources Offi 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Theresa M. Payton director 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
John B Gibson officer: Sr. VP, Service CONVERGYS CORPORATION, 201 EAST FOURTH STREET, CINCINNATI OH 45202
Mark Anthony Bottini officer: Sr. VP of Sales 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Robert L. Schrader officer: VP/Controller 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Stephanie L Schaeffer officer: Chief Legal Officer 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Joseph Doody director CASELLA WASTE SYSTEMS INC, 25 GREENS HILL LANE PO BOX 866, RUTLAND VT 05701

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