Stock (Symbol) |
Fiserv (FISV) |
Stock Price |
$97 |
Sector |
| Financial |
Data is as of |
| March 9, 2016 |
Expected to Report |
| May 3 – May 9 |
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 |
 Fiserv (FISV) provides technology to more than 13,000 banks and credit unions from withdrawing money from an ATM to money transfers and mobile banking. It integrates banks with billers including AT&T, Discover, T-Mobile, Chase, American Express and utilities to make paying bills online easy. The company is solid, producing double-digit profit growth every year since 1986 and management targets 11-18% profit growth going forward. Analysts give the stock has an estimated long-term growth rate of 12% per year. Revenues grow only around 5% a year, but management buys back stock to boost profits. It bought back $400 million last qtr alone, which was 2% of shares outstanding. Fiserv is a relatively conservative stock, and is a solid choice for long-term buy-and-hold investors. Profit are expected to climb a steady 14% the next 4 qtrs. The only issue is FISV has a P/E of 22 which is at the top of its historic range, and the stock is 10% higher than my 2016 Fair Value. I have FISV on my radar for the Conservative Portfolio, and would like to buy it on a dip. |
One Year Chart |
 This stock has been tremendous in the past year, rising 25%. Looking ahead, analysts predict 15%, 15%, 12% and 14% profit growth the next four qtrs, and the company has beaten the street by an average of 3 cents a share the last 4 qtrs. Right now, in this market, investors are paying for consistency. Stocks that deliver consistency — like FISV does — get higher valuations. |
Fair Value |
 I honestly feel FISV isn’t too high at 22x earnings. Until I look at this ten-year history that shows many years when the P/E was in the mid-to-low teens. My Fair Value is 20x earnings, which is $88 a share. I feel the stock is overvalued by around 10% right now. |
Bottom Line |
Fiserv has a tremendous record of growing annual profits in the double-digits dating all the way back to 1986. But right now the stock is selling at a high valuation. I want to purchase FISV for the Conservative Portfolio, but will try to be patient and wait for a dip. This is a solid company with above average safety and I when I buy in I think I’ll end up holding the stock for many years to come. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
