Investors that value growth AND profitability ought to consider a number of tried-and-true FinTech names.
Several days ago we were critical of some of the recent IPO and IPO hopeful crop of companies that enjoyed (even if temporarily) nosebleed valuations while delivering little in the way of recurring revenue much less profitability. Contrast that with the Financial Technology (“FinTech”) space that enjoys growth to varying degrees and rich profit margins.
Despite the fact that the FinTech industry has been around in some shape or form for decades, it remains a fragmented industry. One that continues to innovate (peer-to-peer payments, mobile wallets and distributed ledgers/”blockchain”) and disrupt.
Perhaps one of the reasons why FinTech companies don’t enjoy more of an investor following is because the fragmented nature of the industry has resulted in service providers that in many cases offer a wide variety of products and technology-enabled services. You won’t find many single product pure-play companies. However, for those willing to dig in and invest the time, there are a number of interesting FinTech companies to discover.
To assist with this effort, we have compiled a list of Large Cap FinTech names ranked by revenue growth and EBITDA growth during the period 2014-2019. Our list includes names such as SS&C Technologies (tkr: SSNC), Square (tkr: SQ), PayPal (tkr: PYPL), FIS (tkr: FIS), Fiserv (tkr: FISV), WEX (tkr: WEX) and others. You may access the list here: CEORater Large Cap FinTech Rev & EBITDA comparison. Reach me with any questions at jmaietta@tek2day.com