With strong employment data continuing to come in from the U.S. and Canada, and unemployment rates near all-time lows, the overall economy certainly appears to be doing quite well (as reflected in the stock market).
Finding opportunities to invest directly on the strength of employment growth itself is generally difficult to do, but in this article, I’m going to share with you one company which represents such an opportunity: Paychex (NYSE:PAYX).
Paychex is one of the largest payroll providers in the U.S., and acts as a sort of middleman for businesses to use to ensure payroll is made on time every month, with the correct deductions, etc.
This is a beautiful business from an investor perspective, because Paychex essentially invests the float that is deposited for a few days, and earns transaction fees for each transfer, making this a real “cash cow” of a business.
Investors like Warren Buffett have long touted insurance companies for the exact same reason - the ability to invest the float while banking reserves is a huge benefit for owners of these companies.
Paychex has a strong dividend yield of 3%, and has tons of growth potential with the company’s HR business segment which many analysts believe is undervalued. The company’s dividend is extremely safe, and if anything,
I would expect to see dividend growth for shareholders over the long term, making this one of my top picks in the North American technology space for 2020.
Invest wisely, my friends.
