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4 Electronic Payment Stocks to Gain as Economy Reopens

Easing of lockdown measures across the United States has led both consumer and business activities to increase over the past few weeks. The surge in economic activities is evident in consumers’ expectation of a fast economic revival ahead, as suggested by the unprecedented rise in consumer confidence in May.

Economic Activity Picks Up Across States

As of May-end, all 50 states slowly started to reopen their economies. Stay-at-home orders had started easing toward the end of April, with each state following a timeline of its own to reopen their respective economies.

The pandemic-triggered lockdown had closed businesses, offices, stores, shops and movie theatres across the United States since March. As restrictions have been eased, people are now being able to visit restaurants, diners, offices and business centers, thus gradually going back to their normal routines before the virus hit.

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The lockdown was clearly one of the major economic setbacks in history, but thanks to the reopening of businesses, economic activity is picking up. Places such as salons, health and athletic centers have also become functional, thus fueling consumer activity. Finally, as Italy, Germany, France and other European countries, and parts of Asia are gradually reopening their economies, activities such as flight and hotel bookings are gathering steam too.

Given this surge in economic activities across the country and abroad, it could be ideal to turn one’s attention to the key players in the electronic payments space that could benefit ahead. All these stocks carry a Zacks Rank #3 (Hold).

4 Stocks to Add to Watchlist

PayPal Holdings, Inc. PYPL is a leading provider of online payment solutions. PayPal’s instant payment feature One Touch, social payments service Venmo and several strategic partnerships with companies such as Visa Inc. V, Mastercard Incorporated MA, Facebook, Inc. FB and Alphabet Inc. GOOGL are boosting the company and its reach in the area of electronic payments.

During   first-quarter 2020, PayPal witnessed year-over-year growth of 17% in total active accounts as it added 20.2 million net new active accounts. In addition, the total number of payment transactions was reported at 3.3 billion, up 15% on a year-over-year basis.

PayPal’s expected earnings growth rate for next year is 23.2%. Shares of the company, which belongs to the Zacks Internet - Software industry, have gained 25% over the past month compared to the industry’s gain of 23.4% during the same period.

Square, Inc. SQ is a provider of financial and marketing services. The company is known for its comprehensive commerce ecosystem, which allows sellers to begin, operate and expand their businesses.

The company’s strong balance sheet is reflected in its net cash as of Mar 31, 2020. As of the said date, Square’s net cash was reported at $723.3 million compared with $600.7 million as of Dec 31, 2019. The company’s first-quarter 2020 revenues of $1.38 billion beat the Zacks Consensus Estimate by 5.8% and improved 44% from first-quarter 2019.

Square’s expected earnings growth rate for next year is more than 100%. Shares of the company, which belongs to the Zacks Internet - Software Industry, have gained 37.9% over the past month.

Visa Inc. is an operator of retail electronic payments. The company offers transaction processing services to financial institutions and merchant clients via its global processing platform VisaNet.

The company’s mergers and acquisitions, partnerships and minority investments have effectively pushed its shares higher. Visa’s acquisition of Earthport, Payworks and Verifi, and the ticketing and token services business of Rambus are examples of its rapid expansion.

Visa’s expected earnings growth rate for next year is 15.2%. Shares of the company, which belongs to the Zacks Financial Transaction Services industry, have gained 10.3% over the past month compared to the industry’s gain of 9.6% during the same period.

American Express Company AXP is a provider of charge and credit payment card products, and travel-related services globally. The financial services company’s first-quarter 2020 earnings of $1.98 per share surpassed the Zacks Consensus Estimate by 17.2%.

Its expected earnings growth rate for next year is more than 100%. Shares of the company, which belongs to the Zacks Financial - Miscellaneous Services industry, have gained 21.6% over the past month compared to the industry’s gain of 14.3% during the same period.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>


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American Express Company (AXP) : Free Stock Analysis Report
 
Mastercard Incorporated (MA) : Free Stock Analysis Report
 
Visa Inc. (V) : Free Stock Analysis Report
 
Facebook, Inc. (FB) : Free Stock Analysis Report
 
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
 
PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
 
Square, Inc. (SQ) : Free Stock Analysis Report
 
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