Stock (Symbol) |
Fiserv (FISV) |
Stock Price |
$116 |
Sector |
| Financial |
Data is as of |
| March 23, 2017 |
Expected to Report |
| May 3 – 8 |
Company Description |
 Fiserv, Inc. (Fiserv) is a global provider of financial services technology. The Company provides account processing systems; electronic payments processing products and services, and related services, including document and payment card production and distribution, check processing and imaging, source capture systems, and lending and risk management products and services. The Company’s Payments and Industry Products segment primarily provides debit, credit and prepaid card processing and services, electronic bill payment and presentment services, Internet and mobile banking software and services, person-to-person payment services, and other electronic payments software and services. The Company’s Financial Institution Services business segment provides account processing services, item processing and source capture services, loan origination and servicing products, cash management and consulting services. Source: Thomson Financial |
Sharek’s Take |
 With interest rates up, profits at banks are soaring, which means they have the money to invest to grow their businesses, which is where Fiserv (FISV) comes in. Fiserv provides technology that allows withdrawing money from an ATM, money transfers and mobile banking to more than 13,000 banks and credit unions around the world. It integrates banks with billers including AT&T, Discover, T-Mobile, Chase, American Express and utilities to make paying bills online easy. FISV is a high quality stock that has delivered double-digit profit growth every year since 1986. That’s more than three decades of at least 10% profit growth. And, management targets 4-8% sales growth and 11-18% profit growth going forward. Revenues grow only around 5% a year, but the company buys back lots of stock to boost EPS, and has repurchased around a third of the shares outstanding the past ten years. New technologies like chip cards have helped take profit margins up, and paying via your phone is becoming more mainstream. Fiserv is a safe, conservative stock with an outstanding track record of double-digit profit growth and a business that’s in demand. The negative on the stock is the P/E is 23, which is around double the Est. LTG of 12% per year (no dividend). But, profits grew 16% last qtr with 15% growth expected the next 4 qtrs and you have to pay up for quality. I will add the stock to the Conservative Portfolio today, and I feel the company will continue to churn out mid-teens profit growth for the foreseeable future. |
One Year Chart |
 Fiserv reported 16% profit growth on 5% sales growth last qtr, which met analyst estimates. 2017 profit estimates got a jolt after the company reported earnings, as annual estimates increased from $4.97 to $5.11. Qtly Estimates also rose and are now 12%, 16%, 15% and 16%. The Est. LTG of 12% per year is too low in my opinion. |
Fair Value |
 Like many solid safe double-digit growers, this stock was undervalued during 2009-2012. The S&P 500 was also undervalued during that time. Now, the stock has sold for 22x earnings the past two years and I feel 23x earnings is fair as growth has improved. Although this stock isn’t on sale at this time, I feel the positive momentum will keep the stock going higher. My 2018 Fair Value is $132 which would be a gain of 14% in one year — not bad. |
Bottom Line |
 It’s astounding Fiserv has grown profits at least 10% per year for 30 years. And now with banks banking more profits, FISV’s profit growth might kick up a little more. I love how this company can grow profits in the double-digits while producing just 5% sales growth. I will add FISV to the Conservative Portfolio today, where it will rank 18th in the Power Rankings, and I intend to hold the stock for years or hopefully decades. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio 18 of 32 |
