First Data Corporation (FDC - Free Report) is benefiting from continued focus on globalizing its offerings and investment in technological development, which is helping it to grow organically.
In a year’s time, shares of First Data have gained 33.4%, significantly outperforming the 3.1% rally of the industry it belongs to.
With an expected long-term earnings per share growth rate of 10.7% and a market cap of $22.3 billion, First Data seems to be a stock that investors should retain in their portfolio for now.
Factors Driving First Data’s Performance
The company has a comprehensive product suite that includes retail point-of-sale, e-commerce services, credit solutions, next-generation offerings such as mobile payment services, webstore-in-a-box solutions, cloud-based point-of-sale operating system, and value-added solutions. This is helping First Data to globalize its offerings and increase their receptivity.
First Data Corporation Price and Consensus
The acquisition of BluePay, Acculynk and CardConnect have led to significant additions to First Data’s product portfolio. While BluePay will allow the company to expand its market share in the high-growth integrated payments space, Acculynk is expected to enhance First Data’s extensive payments portfolio. The CardConnect acquisition will help First Data to boost its financial technology capacities.
First Data’s Enterprise Business is also in good shape and expanding through client wins. The company differentiates itself in this space by consistently offering new features and solutions to existing clients apart from making continuous efforts to expand its client base.
Despite riding on significant growth prospects, First Data is not free from overhangs. The company remains susceptible to seasonality, acquisition-related integration risks and foreign exchange risks. However, we believe that a comprehensive product suite, strong global client base and acquisitions bode well for First Data.
Zacks Rank & Stocks to Consider
Currently, First Data carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Business Services sector include Broadridge Financial Solutions (BR - Free Report) , Paychex (PAYX - Free Report) and Convergys , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term expected earnings per share growth rate for Broadridge Financial Solutions, Paychex and Convergys is 10%, 8.4% and 7.5%, respectively.
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