Alliance Data (ADS) Poised for Growth on Segmental Strength
Alliance Data Systems Corporation ADS remains well-poised for growth on the strength of solid performances across all three segments. Organic growth has been driving the top line that has witnessed a five-year CAGR of 18%. Strategic acquisitions expanding international exposure with solid growth opportunities have also aided revenue rise.
The company is expected to continue benefiting from current trends in consumer-based business, thus shifting their marketing spends to data-driven marketing strategies.
Alliance Data has delivered positive surprises in three of the last four quarters with an average beat of 2.70%.
Banking on the strength of segmental performance, Alliance Data estimates to deliver earnings per share of $18.10 on revenues of $7.8 billion in 2017 while 2018 earnings per share are projected at a higher value of $21.50 on greater revenues of $8.7 billion.
Management expects revenues and earnings per share growth of 10% at BrandLoyalty. Bottom line at Epsilon is projected to grow 4% in 2017 riding on growth in auto, CRM and data.
Alliance Data’s solid capital position helps it enhance shareholders’ value via dividends and share buybacks. The company has been authorized to buy back shares worth $1 billion through July 2018. It also initiated a quarterly dividend in fourth-quarter 2016, reflecting a major change in the shareholders’ return policy.
However, escalating expenses remain a concern for Alliance Data, weighing on margin expansion. We expect this metric to increase going forward as the company continues to pursue strategic initiatives.
Stocks That Warrant a Look
Financial transaction service providers that deserve a glance are Visa, Inc. V, Total System Services, Inc. TSS and Green Dot Corporation GDOT.
Visa offers a range of branded card payment product platforms, used by customers to develop and offer credit, charge, deferred debit, debit and prepaid payments as well as access cash. The company witnessed positive estimate revisions over the last few weeks.
Total System Services provides electronic payment processing, merchant services and related services to financial and non-financial institutions in the United States and internationally. The company witnessed positive estimate revisions over the last few weeks.
Green Dot Corporation operates as a pro-consumer technology bank holding company, providing personal banking for the masses. The company witnessed positive estimate revisions over the last few weeks.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Visa Inc. (V) : Free Stock Analysis Report
Total System Services, Inc. (TSS) : Free Stock Analysis Report
Alliance Data Systems Corporation (ADS) : Free Stock Analysis Report
Green Dot Corporation (GDOT) : Free Stock Analysis Report
To read this article on Zacks.com click here.
