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Paychex (Paychex) Graham Number : $22.55 (As of May. 2024)


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What is Paychex Graham Number?

Graham Number is a figure that measures a stock's fundamental value by taking into account the company's earnings per share and book value per share. The Graham number is the upper bound of the price range that a defensive investor should pay for the stock. According to the theory, any stock price below the Graham number is considered undervalued, and thus worth investing in.

As of today (2024-07-19), the stock price of Paychex is $122.5899. Paychex's graham number for the quarter that ended in May. 2024 was $22.55. Therefore, Paychex's Price to Graham Number ratio for today is 5.44.

The historical rank and industry rank for Paychex's Graham Number or its related term are showing as below:

PAYX' s Price-to-Graham-Number Range Over the Past 10 Years
Min: 4.22   Med: 5.32   Max: 9.73
Current: 5.44

During the past 13 years, the highest Price to Graham Number ratio of Paychex was 9.73. The lowest was 4.22. And the median was 5.32.

PAYX's Price-to-Graham-Number is ranked worse than
94.4% of 679 companies
in the Business Services industry
Industry Median: 1.3 vs PAYX: 5.44

Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.


Paychex Graham Number Historical Data

The historical data trend for Paychex's Graham Number 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 Graham Number Chart

Paychex Annual Data
Trend May15 May16 May17 May18 May19 May20 May21 May22 May23 May24
Graham Number
Get a 7-Day Free Trial Premium Member Only Premium Member Only 11.14 12.72 15.57 19.81 22.55

Paychex Quarterly Data
Aug19 Nov19 Feb20 May20 Aug20 Nov20 Feb21 May21 Aug21 Nov21 Feb22 May22 Aug22 Nov22 Feb23 May23 Aug23 Nov23 Feb24 May24
Graham Number 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 19.83 20.31 20.09 21.77 22.55

Competitive Comparison of Paychex's Graham Number

For the Staffing & Employment Services subindustry, Paychex's Price-to-Graham-Number, along with its competitors' market caps and Price-to-Graham-Number 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-Graham-Number Distribution in the Business Services Industry

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

* The bar in red indicates where Paychex's Price-to-Graham-Number falls into.



Paychex Graham Number Calculation

Graham Number is a concept based on Ben Graham's conservative valuation of companies.

Paychex's Graham Number for the fiscal year that ended in May. 2024 is calculated as

Graham Number
=sqrt of (22.5* Tangible Book per Share *EPS without NRI)
=sqrt of (22.5*4.787*4.72)
=22.55

Paychex's Graham Number for the quarter that ended in May. 2024 is calculated as

Graham Number
=sqrt of (22.5*Tangible Book per Share*EPS without NRI (TTM))
=sqrt of (22.5*4.787*4.72)
=22.55

* 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) Graham Number Explanation

Ben Graham actually did not publish a formula like this. But he wrote in The Intelligent Investor (1948 version) regarding to the criteria for purchases:

Current price should not be more than 15 times average earnings of the past three years.

Current price should not be more than 1.5 times the book value last reported. However, a multiplier of earnings below 15 could justify a correspondingly higher multiplier of assets. As a rule of thumb we suggest that the product of the multiplier times the ratio of price to book value should not exceed 22.5. (This figure corresponds to 15 times earnings and 1.5 times book value. It would admit an issue selling at only 9 times earnings and 2.5 times asset value, etc.)

Unlike valuation methods such as DCF or Discounted Earnings, the Graham number does not take growth into the valuation. Unlike the valuation methods based on book value alone, it takes into account the earnings power. Therefore, the Graham Number is a combination of asset valuation and earnings power valuation.

In general, the Graham number is a very conservative way of valuing a stock. It cannot be applied to companies with negative book values.

Paychex's Price to Graham number Ratio for today is calculated as

Price to Graham number=Share Price (Today)/Graham number (Q: May. 2024 )
=122.5899/22.55
=5.44

* 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

Please keep these in mind:

1. Graham Number does not take growth into account. Therefore it underestimates the values of the companies that have good earnings growth. We feel that if the earnings per share grows more than 10% a year, Graham Number underestimates the value.
2. Graham Number punishes the companies that have temporarily low earnings. Therefore, an average of earnings makes more sense in the calculation of Graham Number.
3. Graham Numbers underestimates companies that are light with book.


Paychex Graham Number Related Terms

Thank you for viewing the detailed overview of Paychex's Graham Number 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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