Fidelity National Information Services Offsetting Growth With Margins

Fidelity National Information Services (FIS) has been a so-so performer since my last update on the company in August of 2017. Although the shares are up around 10% since then, slightly better than the S&P 500, the shares have lagged Fiserv (FISV) and Jack Henry (JKHY). I believe this underperformance is due at least in part to FIS's slow pace of organic growth and the challenges the company faces in accelerating that growth to a meaningful degree.

Providing banking and payments technology to banks and other financial institutions remains a good business on balance, and FIS has opportunities to drive further margin leverage and/or pursue value-additive M&A. Even so, the total return potential here looks somewhat lackluster, suggesting the shares are an okay hold but not an especially exciting buy candidate.

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Fidelity National Information Services Offsetting Growth With Margins