Strong Buyouts Boost Fiserv (FISV), Low Cash Balance Ails

Fiserv, Inc. FISV is currently benefiting from its strategic acquisitions and shareholder-friendly measures.

FISV’s second-quarter 2022 adjusted earnings (excluding 64 cents from non-recurring items) per share of $1.56 beat the consensus mark by 1.3% and increased 14% year over year. Adjusted revenues of $4.23 billion beat the consensus estimate by 4.1% and increased 4.5% year over year.

Shares of FISV have inched up 2.9% in the year-to-date period against a 8.6% fall of the industry it belongs to.

Image Source: Zacks Investment Research

How is FISV Faring?

Fiserv continues to expand its product portfolio through strategic acquisitions. The buyout of Finxact is expected to boost FISV’s digital banking strategy by helping it offer its clients smooth and personalized digital banking experiences. Another planned acquisition of BentoBox will enable the acquirer to cater to increasing demand for capabilities that enhance interaction between merchants and customers online. Some other takeovers include Pineapple Payments and Ondot Systems’ transactions.

Fiserv has been consistent with share repurchases so far. In 2021, FISV repurchased 23.3 million shares for $2.57 billion. During 2020, Fiserv bought back 16.1 million shares for $1.64 billion. During 2019, FISV repurchased 4.2 million shares for $394 million. Such moves instill investors’ confidence in the stock and positively impact its earnings per share.

FISV has more long-term debt outstanding than cash in hand. Cash and cash equivalents balance at the end of second-quarter 2022 was $883 million compared with the long-term debt level of $20.9 billion.

Zacks Rank & Key Picks

Fiserv currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the broader Zacks Business Services sector are Avis Budget Group, Inc. CAR, Genpact Limited G and H&R Block, Inc. HRB.

Avis Budget sports a Zacks Rank #1 at present. CAR has an earnings growth rate of 108.4% for 2022.

Avis Budget delivered a trailing four-quarter earnings surprise of 69.5%, on average.  

Genpact carries a Zacks Rank #2 (Buy) at present. G has a long-term earnings growth expectation of 12.3%.

Genpact delivered a trailing four-quarter earnings surprise of 10.1%, on average.  

H&R Block flaunts a Zacks Rank of 1, currently. HRB has a long-term earnings growth expectation of 12.5%.

HRB delivered a trailing four-quarter earnings surprise of 19.2%, on average.
 

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