WEX to Benefit From HSA Assets' Acquisition: Here's How
WEX, Inc.WEX recently announced that it has completed the acquisition of certain health savings account ("HSA") assets from HealthcareBank. The acquisition is expected to boost the company’s adjusted net income in 2021. The deal was previously announced on Feb 11, 2021.
HealthcareBank is the custodian bank for customers of WEX’s Health division.
Robert Deshaies, president of WEX’s Health division, stated, “This asset purchase expands WEX’s role in the attractive consumer-directed healthcare ecosystem and aligns with our growth strategy.” He further added, “We are excited to provide a more streamlined relationship experience, one that positions us to better leverage our investments to provide market-leading HSA solutions.”
We believe that this move will help WEX strengthen its Health and Employee Benefit Solutions segment which offers healthcare payment products and software-as-a-service (SaaS) consumer-directed platforms for the healthcare market, as well as payroll-related and employee benefits to customers in Brazil. Fourth-quarter 2020 revenues of the segment increased 6.3% from the year-ago level to $88.9 million.
Also, WEX has been active on the acquisition front, both in the United States as well as internationally. This helps the company expand its product and service offerings, boost revenue growth and enhance scalability. In 2020, the company completed the acquisitons of eNett, a provider of business-to-business (B2B) payments solutions to the travel industry, and Optal, a company which specializes in optimizing B2B transactions. Both buyouts are expected to strengthen the company’s position in the global travel marketplace.
Over the past six months, shares of WEX have gained 48.8% compared with 9.8% rise of the industry it belongs to.
Zacks Rank and Stocks to Consider
WEX 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 Servicessector are Omnicom OMC, Charles River Associates CRAI and Gartner IT, each carrying a Zacks Rank #2 (Buy).
The long-term expected earnings per share (three to five years) growth rate for Omnicom, Charles River Associates and Gartner is 9.3%, 13% and 13.5%, respectively.
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