Stock (Symbol) |
Fiserv (FISV) |
Stock Price |
$106 |
Sector |
| Financial |
Data is as of |
| December 15, 2016 |
Expected to Report |
| Jan 31 – Feb 6 |
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 |
 Banks are doing great! Which makes a robust shopping environment for Fiserv (FISV). 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. This is a high quality stock that has delivered double-digit profit growth every year since 1986 and management targets 4-8% sales growth and 11-18% profit growth going forward. Again, that’s 30 straight years of double-digit profit growth. Revenues grow only around 5% a year, but the company buys back lots and 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. Fiserv is a safe, conservative stock with an outstanding track record of double-digit profit growth, but the P/E of 21 is a bit higher than the ten-year average of 16 (the P/E was low during the Financial Crisis era). The stock doesn’t pay a dividend because of all the money management spends on stock buybacks. I love this company and the stock but am impatiently waiting for FISV to come down a bit so I can buy in for conservative accounts. My 2017 Fair Value is $99 a share. |
One Year Chart |
 Fiserv reported 11% profit growth last qtr on a 5% increase in sales. It beat the $1.13 estimate by a penny and future estimates stayed pretty much where they were last qtr. This company doesn’t beat by a lot, and profit estimates don’t fluctuate much throughout the year, which gives FISV a high level of certainty. Estimates for the next 4 qtrs are 16%, 9%, 14% and 12%. The Est. LTG is 13% per year which is good but the P/E of 21 makes the stock a little high. |
Fair Value |
 Looking back, this stock was such a bargain during 2008-2011. But at the time I was focused on 20% growers and 13% growers like this didn’t impress me. Meanwhile the stock tripled since then, which is much better than most of my holdings have done. My Fair Value is 20x earnings, which is $99 a share and is slightly higher than the $106 the stock recently sold for. Thus, this stock is better bought “on a dip” but with bank stocks roaring FISV could leave you behind if you try to wait for a better price. |
Bottom Line |
 It’s astounding Fiserv has grown profits at least 10% per year for 30 years. That’s an amazing accomplishment, and puts FISV in the Wall Street Hall of Fame. This stock has high stability and good safety and will be a great addition to conservative growth accounts — if the price is right. New technologies like chip cards and paying for coffee with your phone give opportunity for growth, and higher bank profits mean they can spend more on technology. I have FISV on my radar for the Conservative Portfolio and am looking to buy in if it dips down into the $90s. Once owned, this will become a core holding I intend on buying-and-holding. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
