November 30, 2009 - Global Payments Inc. (GPN-NYSE) provides electronic payments transaction processing services. The company's Merchant Services segment provides credit and debit card transaction processing services, including processing Visa, MasterCard, Discover and JCB credit cards, and cards issued by other card networks; and check-related services comprising check verification, guarantee,and recovery services. This segment also offers proprietary software products to establish revolving check cashing limits for the casinos' customers in the gaming industry.

The company's Money Transfer segment provides consumer money transfer services under the DolEx brand primarily to Latin American immigrants in the United States and Europe. As of May 31, 2009, this segment operated 753 leased and owned retail branches in the United States; and124 leased and owned retail branches internationally.

The company markets its products directly, as well as through independent sales organizations, an internal telesales group, retail outlets, trade associations, alliance bank relationships, and financial institutions. It operates in the United States, Canada, Latin America, the United Kingdom, the Asia-Pacific region, the Czech Republic, and the Russian Federation. The company was founded in 1967 and is headquartered in Atlanta, Georgia.

Not only does Global work with a lot of money, it makes noticeable amounts as well. Since 2001, when the company went public, earnings have increased every year, starting with 47 cents in 2001, growing to $1.96 in 2008, then $2.23 in 2009 (fiscal year ends in May). For 2010, 22 analysts have a consensus estimate of $2.47, followed by $2.82 in 2011.
Quarterly earnings will be out on January 7, 2010. The estimate is for 61 cents a share, a little better than the 60 cents of last year's second period. The following quarter expectations are for 57 cents a share, well above the 45 cents of last year's third period.

There's $1 billion dollars in cash at Global. Debt is only 31% of the capital structure. The balance sheet is solid with plenty of flexibility for acquisitions, stock buybacks or dividend increases. A few months ago, the company arranged a $300 million unsecured term loan from a group of financial institutions. Somewhat remarkable, given that the credit market was almost frozen at the time.

While the U.S. market is the largest contributor to sales and earnings (North American Merchant sales were 69% of sales which also includes Canada), international operations are now 40% of revenues. Increased usage of credit and debit cards seems likely in China, India and Eastern Europe.

More numbers: Market Cap is $4.16 billion. Price to Book is 5.16 with Book Value at $10.12 a share. Operating margin for the last 12 months was 19.22% while the Profit margin was 2.29%. Cash per share is $13.23. Current ratio is 1.22. Beta is .83. The 52-week range has been from $27.48 to $54.34 (recently hit on November 11). There are 81.04 million shares outstanding and a float of 80.37 million shares. Insiders own 5.62% of the stock while Institutions have 90.7%. The annual dividend is 8 cents a share for a yield of .2%.

This stock has a lot going for it, including investor enthusiasm. Valuations are rather high by most measures. Yet they seem justified. It's hard to find stocks with good managemen that delivered revenue and profit increases on a consistent basis, no matter what the economy did. Look deeper into Global Payments if this is the kind of stock you're looking for.

- Company Web site: www.globalpaymentsinc.com

- Ted Allrich