On Jul 9, Zacks Investment Research upgraded
Heartland Payments Systems Inc.
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Heartland Payments witnessed some improvement in its earnings
estimates following the first quarter results and the
announcement of a new share repurchase program. The company's
diversified product profile and enhanced merchant relationships
have also been impressive. Additionally, this payment processor
delivered positive earnings surprises in all of the last 4
quarters with an average beat of 12.3%.
On Apr 30, Heartland Payments reported first quarter earnings
per share of 45 cents that comfortably outpaced the Zacks
Consensus Estimate of 40 cents and year-ago quarter figure of 35
Results were primarily supported by 16.8% growth in net
revenue, driven by a 3.8% increase in transaction processing
volume and 2.2% hike in same store sales. These were partially
offset by a 6.7% increase in total expenses. Consequently,
operating margin edged up to 18.2% from 18.1% in the year-ago
Nevertheless, the steady performance supported the
reaffirmation of Heartland Payment's guidance for 2013. The
company is persistently working towards enhancing its margins by
improving its top line, while also focusing on building a sturdy
Additionally, consistent dividend payouts along with the
recent sanction of the share buyback program instill shareholder
confidence and reflect earnings accretion on account of low share
Based on Heartland Payment's fundamental strength, the Zacks
Consensus Estimate for 2013 rose 1.5% to $1.97 per share in the
last 60 days, secured at the higher-end of the management's
guidance and up 19.2% over the prior-year quarter. The estimate
for 2014 stands at $2.21 a share, up 0.5% in the last 60 days.
Meanwhile, no downward revision in estimates was witnessed for
both the years.
The company's long-term growth, pegged at 14.6% and above the
peer group average of 12.0%, should encourage positive estimate
revisions in the future as well.
Other Stocks to Consider
Apart from Heartland Payments, other stocks that are
outperforming in the financial sector include
Official Payments Holdings Inc.
AmTrust Financial Services Inc.
). All these stocks carry a Zacks Rank #1 (Strong Buy).
AMTRUST FIN SVC (AFSI): Free Stock Analysis
HEARTLAND PAYMT (HPY): Free Stock Analysis
MOODYS CORP (MCO): Free Stock Analysis Report
OFFICIAL PAYMNT (OPAY): Get Free Report
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