Interactive Brokers Group, Inc. (IBKR), TD Ameritrade Holding Corp. (AMTD): These Stocks With Hidden Pockets Of Cash May Benefit From Rising Rates

Paychex’s stock has risen 17,000% since its debut in 1983. That might be hard to duplicate, but PAYX is up 16% over the past 12 months. What’s interesting is that share price growth has lagged behind its peer ADP.

Paychex and ADP are both strong and growing companies, with virtually identical P/E and no significant debt. However, PAYX has a higher dividend yield, higher operating margin and a lower entry price. Unlike ADP, Paychex has no European exposure, and that could be beneficial, considering the U.S. recovery appears to be happening more quickly than Europe’s. PAYX’s growth has lagged behind ADP’s this year, and that could offer investors an opportunity.

Like Interactive Brokers Group, Inc. (NASDAQ:IBKR), I think the current value of PAYX shares are a good value and a good entry point.

Risks to Consider: Willie Sutton had some other witticisms too, such as his reason for carrying a machine gun: “You can’t rob a bank on charm and personality.” Similarly, you can’t invest based on low debt and high payout ratios alone. Do your due diligence and consider what your goals are in investing and whether or not these stocks belong in your portfolio. Be aware of how much trading costs you, so that you don’t deprive yourself of the benefits of dollar-cost averaging.

Action to Take –> If you’re looking for solid financial stocks whose value has not grown as quickly as their peers and look like relative bargains – and also offer good dividends – you might consider IBKR and PAYX.

P.S. — Stocks like PAYX are perfect for what we call a “Dividend Trifecta” strategy. Simply put, it’s a three-part approach to dividends that multiplies the effectiveness of every dollar you invest. Click here to learn more…

– Bristol Voss

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