Thursday, July 16, 2015

Seeking Alpha: Global Payments Amply Rewarded For Solid Growth Traits

Investors are definitely excited about the long-term potential of companies tied into non-cash payment systems and processing. Between Vantiv (NYSE:VNTV), Heartland Payment (NYSE:HPY), and Global Payments (NYSE:GPN), Vantiv is the laggard in having appreciated "only" 15% or so over the last year. Global Payments has maintained a more torrid pace, rising 45% over the last year and another 25% since my last update on the company.

I continue to be a little surprised at the extent to which Global Payments continues to identify opportunities to build its revenue base, its competitive positioning, and its long-term margin structure. I'm a little more surprised at the extent to which the Street seems more than happy to continue paying a high price for those improvements. The market seems to already be discounting 20% long-term annualized free cash flow growth, and that seems like a steep price when rivals like JPMorgan Chase (NYSE:JPM), Bank of America (NYSE:BAC), and U.S. Bancorp (NYSE:USB) not only possess competitive scale in the acquiring/processing markets but are looking to non-banking markets like this as a way to offset sluggish prospects in their core banking operations.

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Global Payments Amply Rewarded For Solid Growth Traits

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