Paychex’s January Small Business Employment Watch shows the Small Business Jobs Index rose by 0.04 percentage points to 99.30, marking a 0.03-point gain from the prior quarter and reflecting stable payrolls among clients with fewer than 50 employees. Hourly earnings growth has held at 2.68% since July 2025, while weekly earnings growth slowed to 2.53% in January. The one-month annualized weekly earnings growth of 1.62% has been below 2% for three consecutive months—a level last seen at the end of 2020. Regionally, the Midwest led job growth for the 20th straight month, and the Education and Health Services sector extended five years of continuous expansion, with its index at 100.57.

During the third quarter, AE Wealth Management LLC increased its Paychex stake by 222.4%, adding 8,385 shares to reach a total of 12,156 shares, valued at $1.54 million at period end. Other institutions also expanded positions: Brighton Jones LLC added 71 shares, Empirical Finance LLC bought 75 shares, Quantum Portfolio Management LLC acquired 75 shares, GPS Wealth Strategies Group LLC purchased 76 shares, and Mission Wealth Management LP added 78 shares. Collectively, institutional and hedge fund ownership stands at 83.47%.

In its latest quarter, Paychex reported revenue of $1.56 billion, up 18.3% year-over-year, and delivered EPS of $1.26, beating consensus by $0.03. Return on equity reached 46.4% with a net margin of 26.5%. The company set full-year 2026 guidance at EPS of 5.48 to 5.53. Paychex declared a quarterly dividend of $1.08, representing an annualized yield of 4.2% and a payout ratio near 98%. Additionally, the board authorized a $1.0 billion share repurchase program, enabling buybacks of up to 2.5% of outstanding shares, signaling management’s confidence in valuation.