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Here's Why You Should Hold FLEETCOR (FLT) in Your Portfolio

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FLEETCOR Technologies, Inc.’s  shares have gained 5% over the past six months against 19.7% decline of the industry it belongs to.

The company has an expected long-term (three to five years) earnings per share growth rate of 15.8%. Its earnings are expected to register growth of 18.6% in 2022 and 11.9% in 2023.

Factors That Bode Well

FLEETCOR’s top line continues to grow organically, driven by continued strong sales, robust retention levels and healthy same-store sales. The company’s organic revenue growth was 15% in the first quarter of 2022.

Acquisitions, over time, have helped FLEETCOR expand its customer base, headcount and operations. The company recently announced that it has agreed to acquire UK-based cross-border payments provider, Global Reach Group. The acquisition is expected to strengthen FLEETCOR’s global position as a non-bank cross-border provider by increasing its scale of payments. It is anticipated to be immediately accretive after completion.

The recent acquisition of Levarti is expected to strengthen FLEETCOR’s airline-lodging business, which reserves multiple hotel rooms for global airlines’ crews and disrupted passengers every year. Levarti’s MAX mobile apps offer passengers an end-to-end digital experience from check-in, on-flight contactless payments, baggage tracking and claims.

FLEETCOR has a track record of returning value to shareholders through share repurchases. In 2021, 2020 and 2019, it repurchased shares worth $1.4 billion, $849.9 million and $694.9 million, respectively.

Some Risks

FLEETCOR has more long-term debt outstanding than cash. Cash and cash equivalent balance at the end of first-quarter 2022 was $2.1 billion compared with long-term debt level of $4.4 billion.

Zacks Rank and Stocks to Consider

FLEETCOR currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the broader Zacks Business Services sector are Avis Budget Group (CAR - Free Report) ,Cross Country Healthcare (CCRN - Free Report) and CRA International (CRAI - Free Report) .

Avis Budget sports a Zacks Rank #1 at present. CAR has a long-term earnings growth expectation of 19.4%. 

Avis Budget delivered a trailing four-quarter earnings surprise of 102%, on average. 

Cross Country Healthcare sports a Zacks Rank of 1 at present. CCRN has a long-term earnings growth expectation of 6.9%.

Cross Country Healthcare delivered a trailing four-quarter earnings surprise of 29.2%, on average. 

CRA International carries a Zacks Rank #2 (Buy), currently. CRAI has a long-term earnings growth expectation of 14.3%.

CRAI delivered a trailing four-quarter earnings surprise of 35.8%, on average.

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