DST Systems Inc.
) have been trending higher post its partnership with Prudential
Retirement, a business unit of Prudential Financial, to provide
its expertise services related to retirement solutions.
Per the agreement, Prudential Retirement will use DST's
Retirement Income Clearing Calculator, a middleware platform
specially built to connect the retirement product providers with
the record keepers. This, in turn, helps the retirement income
product providers to deliver their products to the end users in a
cost effective manner.
DST has been launching innovative products to propel growth
across its Financial Services segment. During the last reported
quarter (third-quarter 2013), DST's revenues from the Retirement
business increased by double digits due to higher number of
Buoyed by these factors, the company expects to continue its
investments in the Financial segment to support the revenue
growth. Financial services companies that use DST's software to
service multiple clients generate incremental revenues with each
additional client and/or transaction. The model ensures a minimum
revenue level even when there are limited transactions.
We believe that DST's business volume and massive scale of
operation in Financial Services will attract new customers.
Moreover, we expect steady contributions from recent acquisitions
to support revenue growth. Continued share buybacks and dividend
payments are the other encouraging factors
On the other hand, decreasing organic revenue growth, tough
Broadridge Financials Solutions Inc.
Advent Software Inc.
), and a high debt burden remain concerns.
Currently, DST has a Zacks Rank #3 (Hold).
ADVENT SOFTWARE (ADVS): Free Stock Analysis
BROADRIDGE FINL (BR): Free Stock Analysis
DST SYSTEMS (DST): Free Stock Analysis Report
FISERV INC (FISV): Free Stock Analysis Report
To read this article on Zacks.com click here.