Metavante (MV)
I haven’t posted about a company that I really like in a while, so I thought that tonight would be a good time to post a small blurb about a company that I think has enormous upwards potential. The company that I am talking about is Metavante. It is fairly likely that you have never heard of this company because you have never dealt with them directly. It is probably the case that you have.
Metavante is one of the largest bill pay providers in the United States. What is Bill Pay? These days, many banks offer free online banking. Free online bill pay is one of the main attractions of online banking. When you as the consumer initiate an online bill payment, the funds are sent to the bill payment provider who then turns those funds into a paper check made out to whomever was specified. The check is then mailed to the recipient. Metavante is one of the premier bill pay providers in the US. The reason that I know this is because our credit union receives about 30+ checks per day from them. Considering our total net deposits is only $500 million, that is a lot of checks. Of the bill pays that come through to our main branch, I would say about 90% of them are from Metavante.
The company does not do just online bill pay though. They offer a wide range of other products and services for their customers. Some of their products and services include:
- Banking and trust solutions
- Business transformation services
- EFT solutions
- ePayment solutions
- Image solutions
- Payment network solutions
I think that online banking has yet to reach a full audience. There should still be a lot more room to grow within this industry. As people become more and more reliant on using online banking, they will be more likely to send an ePayment rather than writing and mailing out a check. The more people that use these online services, the more money Metavante could bring in. Because of this, I see excellent growth potential in this company over the coming years.
I make these recommendations all without looking at the company’s financials. I hope to dig deeper into those sometime in the near future. The company just went public back in November 2nd, 2007. The stock currently trades at $22.94 with a market cap of $2.742 B. They currently have a P/E ratio of about 69, and about 64% of the company is owned by institutions. If the company performs well in the near term, this should allow plenty of room for the institutions to purchase up more shares and drive up the price. Their revenues are about $1.598 billion for the year, which is a 6.25% increase from 2006 levels. For the year 2007, Metavante had profits of 49.451 million, which was a major drop from 2006. This was due largely to the $142.242 million outflow due to special items.