Fiserv bought back 2.1 million common shares during the second quarter for $143 million, and had about $9 million remaining in its existing buyback program.

Fiserv's shares closed at $71.95 Wednesday, returning 22% year-to-date, following a flat return during 2011. The shares trade for 12.5 times the consensus 2013 earnings estimate of $5.77 a share, among analysts polled by Thomson Reuters.

Sterne Agee analyst Greg Smith in August called Fiserv one of his firm's "top picks" among financial technology companies, saying that "Fiserv has the highest percentage of recurring revenue within our coverage universe at roughly 85% so visibility always tends to be relatively higher at the company compared to others."

Smith said that during the second quarter, Fiserv's "internal revenue growth was a little disappointing at 1% as license sales were light and some revenue was pushed out due to increasing scope on some large deals that delayed revenue generation," but that "fortunately, visibility is good for a second half rebound" and for Fiserv's management to achieve its "internal revenue growth guidance for the year of 3%-4.5%."

When discussing SpotPay, Smith says that "it's nice to see them roll this out for their customer base but this isn't anything that's going to move the dial significantly for Fiserv.

On the other hand, Smith says "Fiserv has significant P-to-P services using your bank account, and is big in bill-payment," and that "you add that all up and it has to have significant presence in mobile, which moves the dial for me."

The analyst estimates that Fiserv will earn $5.84 a share during 2013 and said his price target for the shares of $82 is "based on a 14x multiple on our 2013 EPS."

While pushing to innovate in mobile payments, "Fiserv is a very stable company," Smith says, because "if a bank is using Fiserv for core processing, it is very sticky. If you have this key position at the bank, you then want to cross sell more and more services around that."

"The story here is this core position they have with the banks and then layering products and services," he says, adding that "this isn't a fast growing company because they are large with so much market share, but on the margin, there are still are new products and services that banks are buying, which is driving some revenue growth. "We think the second half of this year is shaping well and next year's uptick in their revenue growth rate should drive the shares higher."

Interested in more on Fiserv? See TheStreet Ratings' report card for this stock.

-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

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