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WEX and Chevron Ink Agreement for Improved Card Services

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Shares of WEX Inc. (WEX - Free Report) have fared well in a year’s time. The stock has gained 22.5% compared with the industry’s rise of 20.2%.

As part of the long-term deal signed in Dec 2016, WEX recently inked an agreement with the multinational integrated energy company — Chevron Corporation.

Per the agreement, WEX will offer a wide range of innovative digital solutions to Chevron and Texaco commercial customers. These include Fleet SmartHub, WEXOnline, Fleet DriverDash and more.

Additionally, the corporate payment solutions company provides a comprehensive sales and marketing program to Chevron and manages its card distribution and related payment services. Also, WEX will boost the efforts of Chevron and Texaco marketers and retailers on the back of a strong network of around 8000 retail branded locations in the United States.

WEX to Strengthen Global Foothold

The agreement highlights the company’s focus on establishing foothold in the North American region. In line with this, Scott Phillips, Global Fleet president, WEX, stated, “The agreement shows the tremendous trust that industry places in WEX, underscores our commitment to growth in the North American fleet market, and offers Chevron and Texaco fleet customers a robust, custom card program developed in long-term partnership with the industry.”

To expand in the Asia Pacific region, WEX inked an agreement with Chevron in 2017. Through this agreement, WEX was able to manage fuel card processing platform for Chevron in Singapore, Hong Kong, Malaysia, Thailand and the Philippines.

Our Take

We believe that the agreement will boost the Fleet Solutions segment, which offers customers fleet vehicle payment processing services, particularly designed for commercial and government fleets.

In the last reported quarter, revenues in the segment amounted to $249.61 million, up 17.7% year over year.

Zacks Rank & Other Stocks to Consider

Currently, WEX carries a Zacks Rank #2 (Buy). A few other top-ranked stocks in the Zacks Business Services sector are Heidrick & Struggles International, Inc. (HSII - Free Report) , Information Services Group, Inc. (III - Free Report) and Insperity, Inc. (NSP - Free Report) , each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term expected EPS (three to five years) growth rate for Heidrick & Struggles, Information Services Group and Insperity is 13.5%, 14%, and 18%, respectively.

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