Global Payments Inc

Stock: GPN

Rating: Buy

Author: Waleed M. Tariq

Overview

  • Global Payments provides businesses of all sizes with the world’s leading full commerce environment.
  • This unique, integrated infrastructure handles billions of transactions annually safely and seamlessly.
  • Global Payments works in 100 countries and services 3.5 million merchants and 1,300 banks.

Bullish

  • There are strong fundamentals and steady growth tendencies in the company.
  • Due to collaborations and acquisitions, GPN has built a forward-looking ecosystem with a lot of upside potential.
  • In the long run, GPN is a strong investment because of its solid foundations and growth forecasts.

Bearish

  • The stock market is dry due to poor investor sentiment toward GPN’s financials. This is bearish.

GPN Revenue Streams

  • GPN provides payment technologies. It has three parts.
  • Merchant Solutions: Global payments software and technology provider. Quarterly revenue was $1.5 billion (67 percent of total revenue).
  • Issuer Solutions: Enables financial service organizations to manage card portfolios, reduce complexity, and offer a seamless cardholder experience on a single platform. Quarterly revenue was $522m (24 percent of total revenue).
  • Business & Consumer Solutions: Netspend offers underbanked Americans and companies reloadable debit and payroll cards, demand deposit accounts, and other financial services. Quarterly revenue was $208m (9 percent of total revenue).

Growth Consistent

  • GPN’s long-term growth is based on its intrinsic strength, not market emotion.
  • GPN’s most current quarter (MRQ) sales was $2.2 billion, up from $1.92 billion last year.
  • GPN’s adjusted EPS trend shows it has exceeded analyst forecasts each qtr for over three years.
  • EPS for Q4 2021 is $2.15. GPN’s EPS rose 27.38% on average and 21.34% on median in the past four quarters. If that continues, the company will beat projections.
Source: CNBC

Dividends

  • The current quarter’s $0.25 dividend per share (DPS) is a key distribution determinant and financial barometer for the corporation.
  • A dividend payment ratio of 25% means that 75% of the company’s earnings are still being reinvested to fuel growth.
  • With an expanding EPS and a stable dividend payment ratio, the firm looks like an excellent income alternative.

Future-Driven Partnerships

  • GPN’s stock will benefit in the future if its financial performance meets investor expectations, despite previous issues.
  • The company is leveraging their B2B initiatives by expanding relationships with Citigroup, Amazon, Google, PayPal, and CIBC.

Virgin Money, U.K.

  • The unique agreement with Virgin Money¬†will allow GPN access to additional clients. Virgin Money has around 6.5 million U.K. customers.

Mercedes-Benz Stadium Partner

  • GPN will automate back-office procedures, asset tracking, accounting records, and employee management at Mercedes-Benz Stadium.
  • This will increase income and give the organization more marketing opportunities.

Diversification

  • GPN is making progress on multiple fronts to meet market demand. They’ve enlarged their PayPal partnership to $2.38 trillion cryptocurrencies.
  • GPN bought Zego for $830 million to expand into property-management software.
  • GPN bought MineralTree for $500 million to strengthen its B2B growth strategy.

Conclusion

  • The company’s expanding EPS, dividends, and aggressive collaborations and acquisition with industry behemoths and innovation indicate to a bright future.