Paychex Stock Falls After Firm Announces $0.98 Quarterly Dividend: But Retail Goes Extremely Bullish

Paychex Inc (PAYX) shares were in the spotlight on Friday after the firm declared its quarterly dividend. The company, which provides advisory services in human resources, employee benefits solutions, insurance, and payroll, announced a regular quarterly cash dividend of $0.98 per share on its common stock.

The dividend is consistent with what the firm has paid in the previous three quarters. It is payable on Feb. 27, 2025, to shareholders of record as of Feb. 7, 2025.

Despite the announcement, shares of the firm were trading nearly 1% lower on Friday.

On Stocktwits, retail sentiment flipped into the ‘extremely bullish’ territory (80/100) from ‘neutral’ a week ago. The move was accompanied by a ‘high’ message volume.

PAYX’s Sentiment Meter and Message Volume as of 10:41 a.m. ET on Jan. 10, 2025 | Source: Stocktwits

The company has been in the news lately after it signed a definitive agreement to acquire Paycor HCM, Inc. (PYCR), a provider of human capital management (HCM), payroll, and talent software, in an all-cash transaction for $22.50 per share.

The price represents an enterprise value of approximately $4.1 billion. According to Paychex, the acquisition significantly expands its sales coverage and adds additional growth platforms through its access to Paycor’s strategic partnerships and embedded HCM capabilities.

Paychex expects run-rate cost synergies over $80 million in the near term and significant revenue synergy opportunities over the next several years.    

Meanwhile, the firm reported earlier this week that job growth in U.S. small businesses with fewer than 50 employees averaged modest employment growth throughout 2024, according to the Paychex Small Business Employment Watch.

“At 2.96% in December, hourly earnings growth for U.S. small business workers remained below three percent for the fifth consecutive month,” the firm said.

Meanwhile, Paychex shares have gained over 17% over the past year.

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