Stock (Symbol) |
Fiserv (FISV) |
Stock Price |
$122 |
Sector |
| Financial |
Data is as of |
| September 5, 2017 |
Expected to Report |
| Oct 24 |
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. Source: Thomson Financial |
Sharek’s Take |
 Fiserv (FISV) provides technology banks utilize to allow 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. The rapid adoption of mobile transactions — including peer-to-peer (P2P) money transfers via cell phone — gives this company a good environment for growth. P2P transactions were up 20% last qtr. Fiserv has many differenet programs banks and financial institutions can utilize, including BillMatrix Next which lets people to set up payments, create digital wallets, and schedule recurring payments from their phone, tablets and laptops — from a number of payments types. This 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. Management targets 4-8% sales growth and 11-18% profit growth long-term. Analysts have an Est. LTG of 12% per year on the stock. Managment doesn’t pay a dividend, but does lots of stock buybacks. Last qtr FISV bought back 3.4 million shares and had 212.9 million shares outstanding. That’s an equivalent of reducing the share count 6% on an annualized basis. But with the big buybacks comes debt, and if rates continue to rise the cost of issuing new debt will rise. Overall FISV has repurchased around a third of the shares outstanding the past ten years. Fiserv software is integral to many banks, thus the stock has high certainty. The P/E is 24, which is twice the Est. LTG of 12% per year, but I think its worth it. I feel this stock is fairly valued at this time with 14% upside into 2018. Overall this stock looks to continue to grow at a low double-digit rate into the future. |
One Year Chart |
 Last qtr Fiserv had 2% sales growth with 10% profit growth, which missed estimates of 14%. Management had previously stated it would be a slow qtr for the company, and that revenue growth would pick up in the 2nd half of the year. And it looks like it with qtly Estimates for the next 4 qtrs at 14%, 17%, 9% and 17%. Last qtr I felt the Est. LTG of 12% was too low, that it should be 14%, but now with slow sales growth last qtr and buybacks being made by issuing debt, I feel 12% is more realistic. |
Fair Value |
 My Fair Value on FISV is a P/E of 24, which is what the stock has now. I have 14% upside to 2018’s Fair Value, which seems right. Notice how pretty the profit picture has been for Fiserv. This is a good company. |
Bottom Line |
 Fiserv management feels it’s well positioned to achieve its 32nd consecutive year of double-digit profit growth. And investors have been nicely rewarded throughout the years as the stock’s up five-fold this past decade. Improvements in mobile banking and acquisitions will fuel future growth, and I anticipate this company continuing to grow at a double-digit rate into the future. FISV ranks 22nd of 33 stocks in the Conservative Portfolio Power Rankings. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio 22 of 33 |
