Reasons to Check Out Global Payments Ahead of Its Dividend

GPN stock a solid way to profit beyond its dividend payment.
By Richard Saintvilus ,

Shares of Global Payments (GPN) - Get Report , which makes terminals for electronic payments at cash registers, will begin trading ex-dividend on Tuesday, Nov. 10. That's the last day management of the company will finalize its roster of shareholders to whom it will mail payments.

Headquartered in Atlanta, Global Payments will make a 1 cent a share cash payment that is scheduled to be paid on Nov. 27 to shareholders of record as of Nov. 13. This marks the first quarter that Global Payments will make the 1 cent payment since it was lowered from 2 cents in August. At the current two-for-one stock split adjusted price of around $68, its dividend yield is 0.06%.

Right away, I will say there's nothing attractive about this yield, especially when investors can roll the dice on any company in the S&P 500 (SPX) index and get 2.00% annually. But beyond its dividend, if you're looking for the stock that is poised to outperform in the next 12 to 18 months, GPN stock belongs on your radar.

Global Payments has an attractive business, providing electronic payments processing services for consumers, merchants and independent sales organizations. The company also services government agencies and various financial institutions, which makes Global Payments well-diversified in multiple industries. This means that whenever or wherever a financial transaction is taking place, Global Payments is likely getting a percentage of the deal via transaction fees. And patient investors have been rewarded.

Owing to consistent increases in revenue and profits, GPN stock has surged more than 68% so far in 2015 and skyrocketed 65% in twelve months, demolishing the S&P 500 during both spans. And based on consensus 2016 earnings per share estimates of $5.92 a share, calling for 22% year-over-year growth, GPN stock can still pay. This earnings growth rate would be to more than three times the average growth rate produced by S&P 500 companies in the past couple of years.

What's more, its earnings are projected to climb by an average annual rate of over 12% in the next five years, more than doubling the S&P 500. And with fiscal first-quarter 2016 cash operating margin climbing 150 basic points to 30.5%, Global Payments continues to make more money on each sale it generates, making GPN stock a solid way to profit beyond its dividend payment.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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