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November 15, 2017 | Global Payments Inc. | GPN

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This week’s Stock of the Week works with the biggest names in the payment-processing field and is growing quickly.

Paying with Electrons

Global Payments Inc. (GPN) specializes in electronic transaction processing for small-to-midsized companies around the world.

About three-quarters of revenue comes from North America, 19% from Europe and 8% from the Asia-Pacific region. The company significantly expanded its merchant base in the US through its acquisition last year of Heartland Payment Systems. It also provides credit card and debit card transaction processing services for international card brands including American Express, Discover, MasterCard, Visa and others—and it facilitates the operation of certain debt networks, such as Interac in Canada.

Global Payments provides some of the same electronic-processing services that MasterCard and Visa themselves offer, but the company has the potential to grow more quickly than those companies. Revenue was $2.9 billion in 2016 and likely will be $3.8 billion this year and $3.95 billion in 2018. The firm’s business is driven largely by consumer spending, so a global recession would hurt its stock. So would difficulties integrating companies it has acquired—but it has a strong record of doing this successfully. It pays a minimal dividend of $0.04/share/yr.

Fiscal year: December. Earnings per share: 2018 est./$4.59…2017 est./$3.89…2016/$2.05.

Peter Tuz is president, Chase Investment Counsel, which manages $325 million, and portfolio manager of the $78 million Chase Growth Fund (CHASX) and $22 million Chase Midcap Growth Fund (CHAMX), Charlottesville, Virginia. ChaseInv.com

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Date: November 15, 2017
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