Core Insights - Paychex is expected to provide a healthy dividend and is projected to reach new record share prices in 2025, with a 7% increase anticipated in Q2 following a similar rise in Q1 [1][3] - The company has consistently increased its dividend payouts for over a decade and is on track to be included in the Dividend Aristocrats index [2] - Paychex reported revenue of $1.51 billion for FQ3/CQ1 2025, reflecting a 5% year-over-year growth, driven by increases in client count and revenue per employee [3][4] Financial Performance - The operating margin improved by 180 basis points, supported by AI optimization in digital HR, payroll, and insurance services [4] - Adjusted earnings grew by 8%, surpassing revenue growth by 300 basis points and exceeding consensus estimates by 70 [4] - The annual dividend is $3.92, with a dividend yield of 2.60% and a payout ratio of 81.67% [6][7] Growth Outlook - Guidance for the core Management segment indicates solid single-digit growth, while the forecast for PEO growth and margin strength has been increased [5] - The dividend compound annual growth rate is near 10% and is expected to remain steady in 2025 [8] - Institutional ownership has risen to nearly 85%, indicating strong investor interest [9] Market Trends - Paychex is approaching a critical resistance point at $152, which, if surpassed, could lead to new all-time highs later in the year [10] - Analysts have raised their price targets due to positive guidance, although the stock currently holds a "Reduce" rating among some analysts [12]