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Alliance Data Unit & Dell Extend Ties for Marketing Services

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Epsilon, an Alliance Data Systems Corporation (ADS - Free Report) company, recently extended its agreement with Dell for loyalty marketing services. Per the new agreement, Epsilon will use its Agility Loyalty platform to launch the Dell Advantage Rewards loyalty program.

Epsilon will build, launch and manage the new Dell Advantage Rewards loyalty program in the United States, Brazil and Canada. It also has plans to expand its presence in other countries. Epsilon’s association with the global technology leader Dell dates back to 2010 since when the former has been providing its permission-based email marketing services to the latter.

Epsilon will take care of the technology part of the program through its Agility Loyalty platform and integrated third-party tools.

The new program by Epsilon will help Dell generate an improved return on investment and enhance customer satisfaction. Customers, who are part of the Dell Advantage Rewards program, will benefit from money back, exclusive offers, faster shipping and other perks.

Epsilon continues to leverage its expertise by ramping up the growth profile. In the second quarter of 2018, the segment delivered an improved Adjusted EBITDA, driven by a favorable shift in revenue mix. We expect its business to gain momentum on the back of strategic deals like the one mentioned above. Management estimates mid-single-digit top line and adjusted EBITDA growth in Epsilon.

Organic growth remained a key strength at Alliance Data, indicated by increasing revenues. We believe, the company will retain its revenue momentum in the coming quarters with ample opportunities from the current trend in consumer-based businesses, shifting its marketing spend to data-driven marketing strategies. The company estimates 2018 revenues to grow 10% year over year to $8.2 billion.

Shares of this Zacks Rank #3 (Hold) financial transaction services provider have lost 8.7% year to date against the industry’s rally of 23%. Nonetheless, we expect higher revenues, a solid card services performance, strategic initiatives as well as a robust capital position to turn the stock around in the near term.



Stocks to Consider

Some better-ranked financial transaction service providers are Envestnet, Inc (ENV - Free Report) , Global Payments Inc. (GPN - Free Report) and Core-Mark Holding Company, Inc. (CORE - Free Report) , each stock carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Envestnet provides intelligent systems for wealth management and financial wellness in the United States and internationally. The company delivered an average four-quarter positive surprise of 5.47%.

Global Payments is a provider of payment solutions for credit cards, debit cards, electronic payments and check-related services. The company pulled off an average four-quarter earnings surprise of 3.97%.

Core-Mark Holding markets fresh and broad-line supply solutions to the convenience retail industry. The company came up with an average four-quarter beat of 11.60%.

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