We recently compiled a list of 10 Best Digital Payments Stocks To Buy Now. In this article, we will look at where Global Payments Inc. (NYSE:GPN) ranks among the best digital payments stocks to buy now.
Digital Payments Industry: An Analysis
It was the global pandemic that catalyzed the contactless ways of payment around the world. As physical stores shut down, digital payment methods became the norm with shoppers looking for a less personal and more digital interaction. According to a poll by the digital payment leader Mastercard, more than half of Americans opted for some form of contactless payment such as tap-to-go credit cards and mobile wallets amid COVID. The trend has continued and is here to stay since more than two in every three in-person transactions globally on Mastercard’s network were reported to be contactless in 2023.
McKinsey’s 2023 Digital Payments Consumer Survey reveals that online purchasing took the lead among all other kinds of digital payments among consumers. With the return of in-person shopping, using a device to pay at retail places by scanning a bar code with it or tapping it on a point-of-sale device, also known as in-store digital payments, has grown. Simultaneously, the in-app digital payments and peer-to-peer payments have risen since 2021. This reflects the already mainstream consumer digital payments which are and will continue to evolve.
The other market which tends to be highly addressable and promising is the B2B digital payments market with businesses looking for more ways to drive efficiency and engage in cross-border business transactions. This market was valued at $1.69 trillion in 2023 and is expected to grow at a compound annual growth rate of 9.38% from 2024 to 2033, as reported by Brainy Insights. Global Payments CEO, Cameron Bready, mentioned B2B payments as the next frontier for payments, with significant growth in the digitization of B2B payments. In an interview with CNBC, he emphasized this big opportunity by predicting the B2B market to be 3 to 4 times the size of the consumer market. According to him, this market remains highly fragmented and under-penetrated.
Our Methodology:
We first used a stock screener and mobile payments ETFs to make an extended list of the relevant companies with the highest market caps. Moving on, we shortlisted the top 10 stocks from our list which had the highest number of hedge fund holders. The 10 best digital payments stocks to buy now have been arranged in ascending order of their hedge fund holders as of Q2 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Global Payments Inc. (NYSE:GPN)
Number of Hedge Fund Holders: 66
Global Payments Inc. (NYSE:GPN) powers commerce for businesses globally by facilitating simple, fast, and secure payments. It delivers seamless payments for every business, leading software for specific industries, single-source employer solutions, and better processes for buyers and suppliers. The firm is headquartered in Georgia and has 27,000 team members globally. Global Payments has a powerful ecosystem of brands across various verticals, including globalpayments, Heartland, greatergiving, AdvancedMD, ECSI, and touchnet among others.
Global Payments Inc. (NYSE:GPN) serves as a global powerhouse and has a reach extending across North America, Europe, Asia Pacific, and Latin America. The company claims to lead the industry in innovation, scale, and service. It has successfully built a worldwide commerce ecosystem comprising 4.6 million merchant accounts, 4,000 tech partners, 1500 financial institutions, and over 100 industries. Global Payments remains diversified in terms of geography, vertical markets, and revenue streams to navigate the uncertain macro environment.
With six decades of innovation, the company has been shaping the world of payments. While the firm was first to market with a multi-bank balance reporting system in the 1970s, it served as the early adopter of POS authorization terminals in the 1980s. It launched a next-generation transaction platform for card acceptance in the 2000s. By the 2020s, Global Payments evolved to become a part of the Fortune 500, expanded B2B, and got recognized as the official commerce technology provider of Mercedez-Benz Stadium, State Farm Arena, and Truist Park.
As the worldwide partner of choice for commerce solutions, Global Payments Inc. (NYSE:GPN) continues to deliver results. The company ended the fiscal second quarter of 2024 with high single-digit adjusted net revenue growth and double-digit adjusted earnings per share growth. Additionally, the firm is focusing on simplifying its business and streamlining its operations to drive sustainable growth in the future.
Over the years, Global Payments has positioned itself well in the highly innovative and competitive payments technology industry. In August, the firm appointed Robert Bob Cortopassi as its new president. Under the new growth-oriented leader who has a solid 12-year tenure at the company, the firm is poised to grow. As of Q2, it is held by 66 hedge funds thereby ranking on our list of the best digital payment stocks to buy now. Pzena Investment Management is the largest shareholder in the company.
Overall GPN ranks 7th on our list of the best digital payments stocks to buy. While we acknowledge the potential of GPN as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than GPN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published on Insider Monkey.