Here's Why Fiserv (FISV) Is An Attractive Pick Right Now
Zacks Investment Research | Apr 02, 2018 05:59AM ET
A wise investment decision involves buying well-performing stocks at the right time while selling those that are at risk. In fact, a rise in share price and strong fundamentals signal a stock’s bullish run.
Fiserv (NASDAQ:FISV), Inc. (NYSE:FIS) has performed well so far this year and possesses a great potential to carry the momentum forward. Therefore, if you have not taken advantage of the share price appreciation yet, it’s time you add this gaming stock to your portfolio now.
Here are a few reasons why the stock is worth considering.
Impressive Run on the Market
A look at the company’s price trend reveals that the stock has had an impressive run on the bourse over the past year. Fiserv has gained 23.3%, significantly outperforming the S&P 500’s rally of 12.2%.
Northward Estimate Revisions
In the current year, 15 estimates moved north over the past 60 days versus no southward revisions, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for the current year increased 8.4%.
Positive Earnings Surprise History
Fiservhas a descent earnings surprise history. The company outpaced the Zacks Consensus Estimate in two of the trailing four quarters, delivering an average positive earnings surprise of 0.8%.
Fiserv, Inc. Price and EPS Surprise
Strong Growth Prospects
The company’s Zacks Consensus Estimate for 2018 earnings of $3.11 reflects year-over-year growth of 21.5%. Moreover, earnings are expected to register 13.1% growth in 2019. The stock has long-term expected earnings per share growth rate of 11.5% and a Zacks Rank #2 (Buy).
Solid Growth Drivers
Fiserv’s dominant position in the financial and payments solutions business is a big positive. We believe that the broad and diverse customer base, efforts to enhance operational efficiency, high recurring revenues and continued technology upgrades should help the company to drive growth. The company is also expected to achieve savings of $250 million from its new five-year operational effectiveness program.
Accretive acquisitions have been a key growth factor for Fiserv over the years. In the third quarter of 2017, the company completed the acquisitions of Monitise, PCLender and Dovetail Group. The product-oriented acquisitions are expected to further enhance its clientele in the United States as well as in international markets. Last December, the company acquired Online Banking Solutions Corp to improve digital banking business and cash management capacities.
Get The News You Want
In 2017, the company also completed the acquisitions of ACI Worldwide’s Community Financial Services business and Architect, an online and mobile banking solution for retail and business customers. Furthermore, it acquired a small business – Billers Solutions — which has expanded its presence on the SaaS platform. In early 2013, it acquired Open Solutions — a leading technology provider — for approximately $850 million.
Also, most of the Open Solutions contracts are long term in nature, thus adding recurring revenues to the company’s top line. We believe that the company will continue to pursue accretive acquisitions, which are likely boost its market share and customer base going forward.
Additionally, Fiserv is focused on returning value to shareholders through buybacks. The company bought back 1.5 million shares for $189 million in the fourth quarter of 2018. Fiserv had 10.7 million shares remaining for buyback as of Dec 31, 2017.
Other Stocks to Consider
Some other top-ranked stocks in the business services sector are Mastercard (NYSE:MA) , VeriFone Systems (NYSE:PAY) and Fidelity National Information Services (NYSE:FIS) , each carrying a Zacks Rank #2. You can see .
Long-term earnings growth rate for Mastercard, VeriFone and Fidelity National is projected to be 18.3%, 12%% and 8.9%, respectively.
Can Hackers Put Money INTO Your Portfolio?
Earlier this year, credit bureau Equifax (NYSE:EFX) announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
Zacks Investment Research
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.