Payday can’t come too soon for this Rochester (N.Y.) payroll processing company. Paychex provides payment and other human resources functions for 550,000 small and midsize businesses. It’s a predictable niche that generates huge cash flow—about $500 million in 2006. Customers are disinclined to switch payroll service providers, and Paychex’ emphasis on a well-trained workforce keeps clients content. Despite incursions from larger rival Automatic Data Processing, Paychex is expanding market share, aiming to increase its client base 5% each year. In 2004, Jonathan Judge took over as chief executive for founder Tom Golisano, who remains chairman. The transition has been smooth: Last year sales increased 16% and earnings jumped 26%. Shareholders were kept happy, too, with a robust 2.1% dividend.
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|Economic Sector||Information Technology|
|Industry||Data Processing & Outsourced Services|