Wednesday, September 21, 2011

Total Systems Services (TSS) Dividend Growth Portfolio + Chart

Total System Services (TSS) is a major processor of credit, debit and private label card transactions for institutions in North America. TSS has grown dividends and profits at a 13-20% annual pace for the past 10 years earning a 15-20% return on equity. Despite a drop in revenue resulting from a tightening of consumer purse strings in the recent recession, management is working to return the company to above average growth by:

(1) expanding its international operations,

(2) acquisitions [the company has a strong cash position],

(3) increased marketing effort in North America,

(4) streamlining its operations and aggressive cost cutting.

The primary negative is the continuing sluggish global growth in consumer spending brought on by the debt crisis in Europe, the struggling US economy and slowing growth in Asia.

Total is rated B++ by Value Line, carries a 14% debt to equity ratio and its stock yields 1.7%.


Note: TSS stock has made steady progress off its March 2009 low, surpassing the down trend off its May 2007 high (straight red line) and the November trading high (green line). TSS is in a long term trading range (blue lines). However, it is an intermediate term up trend (purple lines). The wiggly red line is the 30 day moving average. The Dividend Growth Portfolio owns a 50% position in TSS. Shares would be Added at $12. The lower boundary of its Sell Half Range is $28.