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EVERTEC, Inc. (EVTC) – Wall Street’s Best Digest Daily Alert – 8/2/21

This transaction service company is due to report earnings on August 3. Estimates call for EPS of $0.57 on $138.35M in revenues.

This transaction service company is due to report earnings on August 3. Estimates call for EPS of $0.57 on $138.35M in revenues.

EVERTEC, Inc. (EVTC)
From DRIP Investor

Evertec, headquartered in Puerto Rico, provides electronic-transactions services. The company operates in three main areas—merchant acquiring, payment processing, and business solutions. Evertec operates in 26 countries in Latin America and the Caribbean. The firm owns and operates the largest debit network in the Caribbean.

With a market capitalization of just over $3 billion, Evertec participates in a sector that has been seeing its share of mergers and acquisitions. Given the company’s smallish size, the company has takeover potential.

These shares have appeal aside from any takeover possibilities. Operating momentum has been solid, with the company’s per-share profits outpacing the consensus earnings estimates in each of the last four quarters. Earnings estimates have been trending higher.

The stock is trading at just 19 times the 2021 earnings estimate of $2.31 per share. The fairly modest valuation probably reflects some concern about the company’s primary markets and the volatility of the economies in Latin America and the Caribbean. Still, I look for decent top- and bottom-line growth this year and next, and I like the long-term growth prospects of the company’s business.

The stock has been performing fairly well in recent trading, and a breakout above $45 would be especially bullish. The stock provides an under-the-radar play in the payments business and an interesting takeover candidate.

Evertec’s direct-purchase plan has a minimum initial investment of just $50. There is a one-time enrollment fee of $15. Purchase fees are $2.50 plus $0.05 per share. If you purchase using electronic debit of a bank account, the fee is $2 plus $0.05 per share. Each dividend reinvestment will entail a transaction fee of 5% of the amount, with a maximum $5 plus $0.05 per share.

Full and partial dividend reinvestment is available. Selling fees are $25 plus $0.12 per share. The plan administrator is Broadridge. For enrollment information call (877) 830-4936 or visit Broadridge online at dsppwizard.broadridge.com.

Charles B. Carlson, CFA, DRIP Investor, dripinvestor.com, 800-233-5922, July 2021