GLOBAL PAYMENTS INC (GPN) Stock Fundamental Analysis
NYSE:GPN - New York Stock Exchange, Inc. - US37940X1028 - Common Stock - Currency: USD
Taking everything into account, GPN scores 5 out of 10 in our fundamental rating. GPN was compared to 101 industry peers in the Financial Services industry. While GPN belongs to the best of the industry regarding profitability, there are concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on GPN.
1. Profitability
1.1 Basic Checks
GPN had positive earnings in the past year.
GPN had a positive operating cash flow in the past year.
In the past 5 years GPN has always been profitable.
In the past 5 years GPN always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 3.35%, GPN is doing good in the industry, outperforming 67.33% of the companies in the same industry.
GPN has a Return On Equity (7.05%) which is in line with its industry peers.
GPN's Return On Invested Capital of 4.78% is fine compared to the rest of the industry. GPN outperforms 67.33% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for GPN is significantly below the industry average of 11.85%.
The last Return On Invested Capital (4.78%) for GPN is above the 3 year average (4.36%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.35% | ||
| ROE | 7.05% | ||
| ROIC | 4.78% |
ROA(3y)1.85%
ROA(5y)1.8%
ROE(3y)3.95%
ROE(5y)3.55%
ROIC(3y)4.36%
ROIC(5y)3.81%
1.3 Margins
GPN's Profit Margin of 15.54% is fine compared to the rest of the industry. GPN outperforms 64.36% of its industry peers.
GPN's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 23.40%, GPN is in the better half of the industry, outperforming 67.33% of the companies in the same industry.
In the last couple of years the Operating Margin of GPN has grown nicely.
Looking at the Gross Margin, with a value of 62.79%, GPN is in the better half of the industry, outperforming 77.23% of the companies in the same industry.
GPN's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 23.4% | ||
| PM (TTM) | 15.54% | ||
| GM | 62.79% |
OM growth 3Y5.13%
OM growth 5Y1.68%
PM growth 3Y11.11%
PM growth 5Y12.13%
GM growth 3Y3.83%
GM growth 5Y1.31%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so GPN is destroying value.
The number of shares outstanding for GPN has been reduced compared to 1 year ago.
GPN has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, GPN has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.98, we must say that GPN is in the distress zone and has some risk of bankruptcy.
GPN's Altman-Z score of 0.98 is fine compared to the rest of the industry. GPN outperforms 61.39% of its industry peers.
The Debt to FCF ratio of GPN is 5.86, which is a neutral value as it means it would take GPN, 5.86 years of fcf income to pay off all of its debts.
GPN's Debt to FCF ratio of 5.86 is fine compared to the rest of the industry. GPN outperforms 61.39% of its industry peers.
GPN has a Debt/Equity ratio of 0.70. This is a neutral value indicating GPN is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.70, GPN perfoms like the industry average, outperforming 51.49% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | 5.86 | ||
| Altman-Z | 0.98 |
ROIC/WACC0.49
WACC9.71%
2.3 Liquidity
A Current Ratio of 0.97 indicates that GPN may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.97, GPN is in line with its industry, outperforming 46.53% of the companies in the same industry.
A Quick Ratio of 0.97 indicates that GPN may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.97, GPN is in line with its industry, outperforming 49.51% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.97 | ||
| Quick Ratio | 0.97 |
3. Growth
3.1 Past
GPN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.84%, which is quite good.
The Earnings Per Share has been growing by 13.36% on average over the past years. This is quite good.
The Revenue has been growing slightly by 4.68% in the past year.
Measured over the past years, GPN shows a quite strong growth in Revenue. The Revenue has been growing by 15.52% on average per year.
EPS 1Y (TTM)10.84%
EPS 3Y12.23%
EPS 5Y13.36%
EPS Q2Q%11.32%
Revenue 1Y (TTM)4.68%
Revenue growth 3Y5.84%
Revenue growth 5Y15.52%
Sales Q2Q%4.7%
3.2 Future
The Earnings Per Share is expected to grow by 9.75% on average over the next years. This is quite good.
The Revenue is expected to grow by 6.22% on average over the next years.
EPS Next Y6.56%
EPS Next 2Y9.65%
EPS Next 3Y11.07%
EPS Next 5Y9.75%
Revenue Next Year1.01%
Revenue Next 2Y3.29%
Revenue Next 3Y4.59%
Revenue Next 5Y6.22%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 6.61 indicates a rather cheap valuation of GPN.
Compared to the rest of the industry, the Price/Earnings ratio of GPN indicates a rather cheap valuation: GPN is cheaper than 86.14% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.88, GPN is valued rather cheaply.
The Price/Forward Earnings ratio is 6.20, which indicates a rather cheap valuation of GPN.
Based on the Price/Forward Earnings ratio, GPN is valued cheaper than 84.16% of the companies in the same industry.
GPN's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.20.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.61 | ||
| Fwd PE | 6.2 |
4.2 Price Multiples
75.25% of the companies in the same industry are more expensive than GPN, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, GPN is valued cheaper than 87.13% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.55 | ||
| EV/EBITDA | 7.69 |
4.3 Compensation for Growth
GPN's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of GPN may justify a higher PE ratio.
PEG (NY)1.01
PEG (5Y)0.49
EPS Next 2Y9.65%
EPS Next 3Y11.07%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.39%, GPN has a reasonable but not impressive dividend return.
In the last 3 months the price of GPN has falen by -32.38%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 4.92, GPN pays a bit more dividend than its industry peers.
With a Dividend Yield of 1.39, GPN pays less dividend than the S&P500 average, which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.39% |
5.2 History
The dividend of GPN is nicely growing with an annual growth rate of 21.27%!
GPN has paid a dividend for at least 10 years, which is a reliable track record.
GPN has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)21.27%
Div Incr Years0
Div Non Decr Years6
5.3 Sustainability
16.10% of the earnings are spent on dividend by GPN. This is a low number and sustainable payout ratio.
GPN's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP16.1%
EPS Next 2Y9.65%
EPS Next 3Y11.07%
76.31
-0.32 (-0.42%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners93.41%
Inst Owner Change0.88%
Ins Owners0.85%
Ins Owner Change3.67%
Market Cap18.73B
Analysts75.5
Price Target112.52 (47.45%)
Short Float %3.17%
Short Ratio2.26
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.39% |
Yearly Dividend0.99
Dividend Growth(5Y)21.27%
DP16.1%
Div Incr Years0
Div Non Decr Years6
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.74%
Min EPS beat(2)-2.29%
Max EPS beat(2)-1.2%
EPS beat(4)1
Avg EPS beat(4)-0.96%
Min EPS beat(4)-2.29%
Max EPS beat(4)0.03%
EPS beat(8)4
Avg EPS beat(8)-0.06%
EPS beat(12)5
Avg EPS beat(12)-0.18%
EPS beat(16)8
Avg EPS beat(16)0.34%
Revenue beat(2)0
Avg Revenue beat(2)-1.82%
Min Revenue beat(2)-1.96%
Max Revenue beat(2)-1.67%
Revenue beat(4)0
Avg Revenue beat(4)-1.24%
Min Revenue beat(4)-1.96%
Max Revenue beat(4)-0.64%
Revenue beat(8)1
Avg Revenue beat(8)-0.72%
Revenue beat(12)5
Avg Revenue beat(12)2.88%
Revenue beat(16)9
Avg Revenue beat(16)4.87%
PT rev (1m)-15.96%
PT rev (3m)-18.45%
EPS NQ rev (1m)-0.57%
EPS NQ rev (3m)-5.57%
EPS NY rev (1m)-1.09%
EPS NY rev (3m)-4.91%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.18%
Revenue NY rev (1m)-0.05%
Revenue NY rev (3m)-2.51%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.61 | ||
| Fwd PE | 6.2 | ||
| P/S | 1.85 | ||
| P/FCF | 6.55 | ||
| P/OCF | 5.3 | ||
| P/B | 0.84 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.69 |
EPS(TTM)11.55
EY15.14%
EPS(NY)12.31
Fwd EY16.13%
FCF(TTM)11.64
FCFY15.26%
OCF(TTM)14.39
OCFY18.86%
SpS41.17
BVpS90.76
TBVpS-52.7
PEG (NY)1.01
PEG (5Y)0.49
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.35% | ||
| ROE | 7.05% | ||
| ROCE | 5.82% | ||
| ROIC | 4.78% | ||
| ROICexc | 5.1% | ||
| ROICexgc | 58.12% | ||
| OM | 23.4% | ||
| PM (TTM) | 15.54% | ||
| GM | 62.79% | ||
| FCFM | 28.28% |
ROA(3y)1.85%
ROA(5y)1.8%
ROE(3y)3.95%
ROE(5y)3.55%
ROIC(3y)4.36%
ROIC(5y)3.81%
ROICexc(3y)4.61%
ROICexc(5y)4.02%
ROICexgc(3y)47.47%
ROICexgc(5y)47.57%
ROCE(3y)5.34%
ROCE(5y)4.65%
ROICexcg growth 3Y5.38%
ROICexcg growth 5Y12.85%
ROICexc growth 3Y11.96%
ROICexc growth 5Y18.11%
OM growth 3Y5.13%
OM growth 5Y1.68%
PM growth 3Y11.11%
PM growth 5Y12.13%
GM growth 3Y3.83%
GM growth 5Y1.31%
F-Score7
Asset Turnover0.22
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | 5.86 | ||
| Debt/EBITDA | 3.71 | ||
| Cap/Depr | 36.24% | ||
| Cap/Sales | 6.68% | ||
| Interest Coverage | 3.82 | ||
| Cash Conversion | 83.57% | ||
| Profit Quality | 181.98% | ||
| Current Ratio | 0.97 | ||
| Quick Ratio | 0.97 | ||
| Altman-Z | 0.98 |
F-Score7
WACC9.71%
ROIC/WACC0.49
Cap/Depr(3y)36.77%
Cap/Depr(5y)33.3%
Cap/Sales(3y)6.79%
Cap/Sales(5y)6.4%
Profit Quality(3y)601.21%
Profit Quality(5y)472.37%
High Growth Momentum
Growth
EPS 1Y (TTM)10.84%
EPS 3Y12.23%
EPS 5Y13.36%
EPS Q2Q%11.32%
EPS Next Y6.56%
EPS Next 2Y9.65%
EPS Next 3Y11.07%
EPS Next 5Y9.75%
Revenue 1Y (TTM)4.68%
Revenue growth 3Y5.84%
Revenue growth 5Y15.52%
Sales Q2Q%4.7%
Revenue Next Year1.01%
Revenue Next 2Y3.29%
Revenue Next 3Y4.59%
Revenue Next 5Y6.22%
EBIT growth 1Y7.77%
EBIT growth 3Y11.27%
EBIT growth 5Y17.46%
EBIT Next Year13.25%
EBIT Next 3Y8.65%
EBIT Next 5Y10.12%
FCF growth 1Y79.67%
FCF growth 3Y7.7%
FCF growth 5Y21.41%
OCF growth 1Y57.1%
OCF growth 3Y8.3%
OCF growth 5Y20.49%