The fuel card and workforce payment products to businesses company announced yesterday that it has agreed to purchase the privately held Comdata Inc. from the portfolio company Ceridian LLC for $3.45 billion.
Comdata provides business-to-business electronic payment solutions and offers fleet, virtual card, and gift card solutions to over 20,000 customers.
Must Read: Warren Buffett's 25 Favorite Stocks
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he and Stephanie Link think could be potentially HUGE winners. Click here to see the holdings for FREE
“Comdata’s virtual payments business will add a completely new growth leg to FleetCor. We believe that the combination will result in significant synergies as we implement our operating disciplines to their portfolio of businesses,” said FleetCor CEO Ron Clarke.“We expect the acquisition to be meaningfully accretive to earnings in fiscal year 2015. While our financial leverage will increase, we expect to de-lever quickly from the combined cash flow of the businesses,” FleetCor’s chief financial officer Eric Dey added. Separately, TheStreet Ratings team rates FLEETCOR TECHNOLOGIES INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation: "We rate FLEETCOR TECHNOLOGIES INC (FLT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity." Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 12.2%. Since the same quarter one year prior, revenues rose by 23.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- FLEETCOR TECHNOLOGIES INC has improved earnings per share by 18.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, FLEETCOR TECHNOLOGIES INC increased its bottom line by earning $3.37 versus $2.51 in the prior year. This year, the market expects an improvement in earnings ($5.08 versus $3.37).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the IT Services industry average. The net income increased by 21.1% when compared to the same quarter one year prior, going from $73.10 million to $88.55 million.
- The gross profit margin for FLEETCOR TECHNOLOGIES INC is rather high; currently it is at 57.61%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 32.37% significantly outperformed against the industry average.
- Net operating cash flow has increased to $106.23 million or 10.19% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -4.06%.
- You can view the full analysis from the report here: FLT Ratings Report
Check Out Our Best Services for Investors
Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
Check Out Our Best Services for Investors
Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
Every recommendation goes through 3 layers of intense scrutinyquantitative, fundamental and technical analysisto maximize profit potential and minimize risk.
Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.