Daily Stock Analysis: Deluxe Corporation

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Deluxe Corporation (DLX) provides payment solutions. The company operates in 4 segments.

(1) Payments include merchant in-store, online, and mobile payment solutions; treasury management solutions, including remittance and lockbox processing, remote deposit capture, receivables management, payment processing, and paperless treasury management; payroll and disbursement services, including Deluxe Payment Exchange; and fraud and security services.

(2) Data Solutions include data-driven marketing solutions; hosted solutions, including digital engagement, logo design; web hosting, and design services.

(3) Promotional Solutions include business forms, accessories, advertising specialties, and promotional apparel.

(4) Checks include printed business and personal checks.

The company was formerly known as Deluxe Check Printers, Incorporated, and changed its name to Deluxe Corporation in 1988.

Deluxe Corporation was founded in 1915 and is headquartered in Minneapolis, Minnesota.

Three key data points gauge Deluxe 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.
 

DLX Price

Over the past year, Deluxe’s share price dropped about 20.1% from $21.05 to $18.50 as of Wednesday’s market close.

If Deluxe stock trades in the range of $14.00 to $29.00 this next year, its recent $18.50 share price might rise to $23.00 by next year. Of course, Deluxe’s price could drop about the same $4.50 amount, or more.

My upside estimate of $4.50, however, is $4.33 below the median of 1-year target prices set by 3 analysts tracking the stock for brokers.
 

DLX Dividend

Deluxe’s most recent $0.30 quarterly dividend, paid June 5th to shareholders of record May 19th, equates to $1.20 annually and throws a yield of 6.49% as of Wednesday’s closing price.
 

DLX Returns

Adding the $1.20 anticipated annual dividend to Deluxe’s estimated $4.50 price upside, reveals a $5.70 potential gross gain per share for the coming year.

At Wednesday’s $18.50 closing price, a little under $1000 would buy 54 shares.

A $10 broker fee (if charged), paid half at purchase and half at sale, might cost us about $0.19 per share.

Subtracting that maybe $0.19 brokerage cost from my estimated $6.70 gross gain per share makes a net gain amounting to $6.51 X 54 shares = $351.54 for about a 35% net gain.

This may be the time to pounce on Deluxe Corp. But beware, while its dividend is secure its price continues falling, and is lately priced $60.37 below the stock’s all-time high of $78.87 posted back on January 22nd 2018.

The foregoing article is based on past history of Deluxe Corp. The only accurate measure of future performance is from active investment in the company.


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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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