Riding on a steady growth momentum, shares of
Heartland Payment Systems Inc.
) hit a new 52-week high of $50.44 on Jan 7. This financial
transaction service provider's shares have escalated 65.2% since
the beginning of 2013.
Moreover, shares of Heartland Payment have jumped about 23%
alone, since the company reported its third-quarter 2013 results
at the end of October with a positive earnings surprise of 10.7%.
The encouraging momentum of this Zacks Rank #2 (Buy) stock is
fuelled by improved core growth coupled with a strong competitive
Yesterday's closing price represents a robust one-year return
of about 60.3% against a return of 25.3% clocked by the S&P
500 index. Average volume of shares traded over the last three
months stands at approximately 387.9K.
On Oct 30, Heartland Payment reported third-quarter operating
earnings per share of 62 cents, which noticeably surpassed the
Zacks Consensus Estimate of 56 cents and the year-ago quarter
number of 49 cents.
Results reflected sturdy growth in card processing and
Payroll. Moreover, solid contribution came from Campus Solutions,
whereas substantial improvement was also witnessed within
Micropayments. The installation of new card margin and same store
sales also drove the transaction processing volume within small
and mid-sized enterprises.Growth was, however, partially hindered
by higher expenses and reduced operating cash flow.
Overall, Heartland Payment enjoys a flexible and simplified
capital position. The company also benefits from strategic
acquisition and alliances together with a dynamic business mix.
The outlook for 2013 along with consistent return of excess
capital further boosts investors' confidence in the stock.
Further, valuation looks very compelling for Heartland
Payment. Both on forward price-to-earnings and price-to-book
basis, the shares are trading at a premium of about 15% and 81%,
respectively, to the peer group average. Moreover, return on
equity of 33.7% and return on assets of 9.1% stood modestly
higher than the peer group average. Even estimated long-term
earnings growth is pegged at 14.7%, higher than the peer group
average of 13.2%.
Some better-ranked financial stocks that warrant a look are
Alliance Data Systems Corp.
). All these stocks carry the same Zacks Rank as Heartland
ALLIANCE DATA (ADS): Free Stock Analysis
FISERV INC (FISV): Free Stock Analysis Report
HEARTLAND PAYMT (HPY): Free Stock Analysis
VISA INC-A (V): Free Stock Analysis Report
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