Global Payments Inc (NYSE: GPN)

Sector: Industrials Industry: Specialty Business Services CIK: 0001123360
Market Cap 11.52 Bn
P/B 12.59
P/E 284.78
P/S 8.66
ROIC (Qtr) 4.21
Div Yield % 0.42
Rev 1y % (Qtr) 0.50
Total Debt (Qtr) 16.20 Bn
Debt/Equity (Qtr) 0.71
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About

Investment thesis

Bull case

  • Operating cash flow of 2.79B provides exceptional 41.10x coverage of minority interest expenses 67.99M, showing strong core operations.
  • Operating cash flow of 2.79B provides strong 19.31x coverage of stock compensation 144.70M, indicating sustainable incentive practices.
  • Robust free cash flow of 2.16B exceeds capital expenditure of 633.56M by 3.41x, indicating strong organic growth funding capability.
  • Cash position of 2.60B provides exceptional 38.28x coverage of minority interest expenses 67.99M, indicating strong liquidity.
  • Tangible assets of 26.95B provide robust 8.68x coverage of other current liabilities 3.10B, indicating strong asset backing.

Bear case

  • Operating cash flow of 2.79B provides thin coverage of dividend payments of (241.80M) with a -11.56 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Operating cash flow of 2.79B barely covers operating expenses of (273.13M) with a -10.23 ratio, suggesting thin operational efficiency margins and limited flexibility.
  • Operating earnings of 2.88B show weak coverage of depreciation charges of 1.59B, with a 1.81 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 2.16B represents just -1.47x of debt issuance (1.47B), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • High financing cash flow of (3.74B) relative to working capital of (1.23B), which is 3.05x suggests concerning dependence on external funding for operational needs.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Specialty Business Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CTAS Cintas Corp 120.08 Bn 556.91 33.85 3.24 Bn
2 RELX Relx Plc 56.19 Bn 20.01 4.34 9.82 Bn
3 TRI Thomson Reuters Corp /Can/ 37.42 Bn 24.91 5.00 2.44 Bn
4 CPRT Copart Inc 36.25 Bn 22.74 7.79 0.10 Bn
5 RBA Rb Global Inc. 19.20 Bn 49.09 4.24 4.21 Bn
6 ULS UL Solutions Inc. 14.12 Bn 43.32 4.92 0.74 Bn
7 GPN Global Payments Inc 11.52 Bn 284.78 8.66 16.20 Bn
8 ARMK Aramark 10.37 Bn 32.72 0.55 6.57 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.24 2.48
EV to Cash from Ops. EV/CFO 31.82 30.22
EV to Debt EV to Debt 0.70 31.08
EV to EBIT EV/EBIT 81.67 94.66
EV to EBITDA EV/EBITDA 32.60 18.37
EV to Free Cash Flow [EV/FCF] EV/FCF 35.67 -20.73
EV to Market Cap EV to Market Cap 0.99 178.66
EV to Revenue EV/Rev 8.54 8.12
Price to Book Value [P/B] P/B 12.59 5.37
Price to Earnings [P/E] P/E 284.78 65.19
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 7.24 -15,800.59
Dividend Payout Ratio % Div Payout % (Qtr) 14.00 10.14
Dividend per Basic Share Div per Share (Qtr) 1.00 0.35
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 11.23 7.65
Interest Coverage Int. cover (Qtr) 4.72 30.46
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 2.27 -178.22
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -11.52 155.14
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 5.38
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 15.06 -34.92
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -0.95 -86.28
EBIT Growth (1y) % EBIT 1y % (Qtr) 34.00 -22.62
EBT Growth (1y) % EBT 1y % (Qtr) 49.35 -287.35
EPS Growth (1y) % EPS 1y % (Qtr) 34.27 -118.47
FCF Growth (1y) % FCF 1y % (Qtr) -1.01 -146.43
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -0.10 2.63
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.19 0.84
Cash Payout Ratio Cash Payout (Qtr) 0.07 -0.03
Cash Ratio Cash Ratio (Qtr) 0.31 1.15
Current Ratio Curr Ratio (Qtr) 0.86 4.12
Debt to Equity Ratio Debt/Equity (Qtr) 0.71 0.92
Interest Cover Ratio Int Coverage (Qtr) 4.72 30.46
Times Interest Earned Times Interest Earned (Qtr) 4.72 30.46
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 50.20 -33.89
EBIT Margin % EBIT Margin % (Qtr) 32.35 -43.32
EBT Margin % EBT Margin % (Qtr) 25.49 -44.88
Gross Margin % Gross Margin % (Qtr) 67.10 39.81
Net Profit Margin % Net Margin % (Qtr) 19.70 -41.60