4-Star Stocks Poised to Pop: Paychex

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, payroll and personnel services provider Paychex (NAS: PAYX) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Paychex's business and see what CAPS investors are saying about the stock right now.

Paychex facts

Headquarters (Founded)Rochester, N.Y. (1971)
Market Cap$11.4 billion
IndustryData processing and outsourced services
Trailing-12-Month Revenue$2.2 billion
ManagementFounder/Chairman Thomas Golisano
CEO Martin Mucci
Return on Equity (Average, Past 3 Years)35.8%
Cash/Debt$411.1 million / $0
Dividend Yield4%
CompetitorsADP
Insperity
TriNet Group

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 95% of the 1,519 members who have rated Paychex believe the stock will outperform the S&P 500 going forward.  

Late last year, one of those Fools, scoobster007, nicely summed up the bull case for our community:

[Paychex] will outperform in both the short term (several months) and the longer term (3-4 years). It has no debt, expenses are in line, it keeps coming up with new ways to earn money either organically or through purchases. It is profitable and will become more so as it grows over the next several years. Once the economy starts to improve, it will do much better than the market for these reasons and also because it will begin to earn a lot more money on its "float"; that is the money it holds for its clients until it is time to pay their employees etc.

Of course, despite its four-star rating, Paychex may not be your top choice. If that's the case, we've compiled a special free report for investors called "Secure Your Future With 11 Rock-Solid Dividend Stocks," which uncovers several other juicy income opportunities. The report is 100% free, but it won't be around forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the newTrackPoisedToCAPS account.

At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Paychex and ADP. Motley Fool newsletter services have also recommended creating a write covered strangle position in Paychex. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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