Here's Why You Should Hold on to Global Payments (GPN) Stock
Zacks Investment Research | Aug 29, 2021 10:07PM ET
Global Payments (NYSE:GPN) Inc. FLT have hiked their earnings guidance for 2021 as well.
Business Tailwinds/h3
The company’s revenues have been gaining on the back of strong performances across Merchant Solutions, Issuer Solutions, and Business and Consumer Solutions units. Time and again, it has been acquiring and joining forces with several financial institutions to roll out innovative payment solutions and bolster geographical presence. Several contract wins and renewals have strengthened partners’ and customers’ trust on the company’s capabilities.
Global Payments’ acquisition of TSYS is a crucial deal. It has provided the much-needed scale to the company’s business and enabled it to foray across several new markets. The merger-related synergies stemming from TSYS buyout are expected to result in cost savings and thereby benefit the bottom line. The company continues to anticipate annual run rate expense synergies of at least $400 million by September 2022, which marks the third year of closing of TSYS merger. Besides, it has made continued investments in technology aimed at capitalizing on sound prospects in the digital payments space.
Global Payments boasts of a strong cash balance and robust cash generating abilities, which have enabled it to undertake numerous growth-linked initiatives and prudently deploy capital. Recently, management approved a 28.2% hike in the quarterly dividend. Its leverage ratio of 27.7% at the second-quarter end remained lower than the industry’s figure of 37.9%.
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