Current Analysis: Cass Information Systems (CASS)

Cass Information Systems Inc (CASS) is a provider of payment and information processing services to large manufacturing, distribution and retail enterprises across the United States.

The company provides transportation invoice rating, payment processing, auditing, accounting, and transportation information. It is also a processor and payer of energy invoices, including electricity, gas, waste, and other facility-related expenses.

It operates in two segments: Information Services and Banking Services. The firm generates maximum revenue from the Information Services segment.

The company was formerly known as Cass Commercial Corporation and changed its name to Cass Information Systems, Inc. in January 2001.

Cass Information Systems, Inc. was founded in 1906 and is headquartered in St. Louis, Missouri.

 

Three key data points gauge Cass Information Systems Inc or any dividend-paying firm.

The key three are:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money.

 

CASS Price

Over the past year, CASS’s share price increased about 12.79% from $37.29 to $38.38 as of Friday’s market close.

If CASS’s stock trades in the range of $34.00 to $50.00 this next year, its recent $38.38 share price might rise to $42.00 by next year. Of course, CASS’s price could drop about the same $3.62 amount, or more.

My upside estimate of $3.62, however, is in line with the median of one year target prices estimated by analysts tracking CASS for brokers.

 

CASS Dividend

Cass Information Systems Inc has paid variable quarterly dividends since September 15, 1991. CASS’s most recent quarterly dividend, payable September 15th to shareholders of record September 1st is $0.29  So, CASS’s  annual dividend payout is projected to be $1.16 and yield 3.02% per Friday’s closing price.

 

CASS Returns

Adding the $1.16 anticipated annual dividend to CASS’s estimated $3.62 possible price upside, reveals a $4.78 potential gross gain per share for the coming year.

At Friday’s $38.38 closing price, a little over $1000 would buy 26 shares.

A $10 broker fee (if charged), paid half at purchase and half at sale, might cost us about $0.38 per share.

Subtracting that maybe $0.38 brokerage cost from my estimated $4.78 gross gain per share makes a net gain of $4.40 X 26 shares = $116.74 or about a 11.7% net gain.

This may be the time to pounce on Cass Information Systems Inc shares. But beware, CASS is a bank and payment services operation. Furthermore, the estimated $30.20 dividend from $1000 invested comes as less than the recent single share price. Wait for CASS shares price to pullback to $34.00 before you pounce. The choice is yours.

Remember, the true value of any stock is best realized by your personal ownership of shares.


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Disclaimer:  This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a ...

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