DST Systems (DST) Downgraded to “Sell” at Zacks Investment Research

Zacks Investment Research cut shares of DST Systems (NYSE:DST) from a hold rating to a sell rating in a report released on Tuesday.

According to Zacks, “DST Systems is a worldwide provider of information processing software and systems. We believe that DST Systems’ business volume and massive scale of operation in Financial Services will attract new customers. Moreover, we expect steady contributions from acquisitions (BFDS and IFDS) to support revenue growth. Continued share buybacks and dividend payments are the other encouraging factors. The company also has a strong business model. It generates recurring revenues and a good percentage of its business comes from long-term contracts with its customers. The model ensures a minimum revenue level even when there are limited transactions. However, persistent decline in registered accounts, a high debt burden, ongoing consolidation in the U.S. financial services market and stiff competition from peers might put its fundamentals under pressure. Notably, shares of the company has underpreformed the industry over the past one year.”

A number of other research analysts have also recently issued reports on DST. Robert W. Baird reiterated a buy rating and set a $68.00 price objective on shares of DST Systems in a research note on Thursday, October 12th. Morgan Stanley lifted their price objective on DST Systems from $57.00 to $61.00 and gave the company an equal weight rating in a research note on Monday, October 23rd. Two equities research analysts have rated the stock with a sell rating, one has assigned a hold rating and three have given a buy rating to the company’s stock. DST Systems has an average rating of Hold and a consensus target price of $68.50.

Shares of DST Systems (NYSE:DST) traded up $0.41 during trading hours on Tuesday, reaching $62.37. The company’s stock had a trading volume of 262,073 shares, compared to its average volume of 247,300. The stock has a market capitalization of $3,760.00, a PE ratio of 9.42, a price-to-earnings-growth ratio of 1.72 and a beta of 1.37. DST Systems has a 1-year low of $50.22 and a 1-year high of $63.08. The company has a quick ratio of 1.09, a current ratio of 1.09 and a debt-to-equity ratio of 0.42.

DST Systems (NYSE:DST) last announced its quarterly earnings data on Friday, October 20th. The technology company reported $0.76 earnings per share (EPS) for the quarter, beating the Zacks’ consensus estimate of $0.73 by $0.03. The business had revenue of $562.60 million during the quarter, compared to analysts’ expectations of $523.57 million. DST Systems had a return on equity of 16.20% and a net margin of 21.26%. The firm’s quarterly revenue was up 45.5% compared to the same quarter last year. During the same quarter in the previous year, the business earned $0.77 earnings per share. sell-side analysts predict that DST Systems will post 3.08 EPS for the current fiscal year.

The firm also recently declared a quarterly dividend, which was paid on Friday, December 8th. Stockholders of record on Wednesday, November 22nd were paid a $0.18 dividend. This represents a $0.72 annualized dividend and a dividend yield of 1.15%. The ex-dividend date of this dividend was Tuesday, November 21st. DST Systems’s dividend payout ratio is currently 10.88%.

Several hedge funds have recently bought and sold shares of DST. Bank of Montreal Can raised its stake in shares of DST Systems by 102.6% in the second quarter. Bank of Montreal Can now owns 2,926 shares of the technology company’s stock worth $180,000 after purchasing an additional 1,482 shares during the last quarter. Beach Investment Management LLC. purchased a new position in shares of DST Systems in the second quarter worth $1,190,000. Schwab Charles Investment Management Inc. raised its stake in shares of DST Systems by 107.1% in the second quarter. Schwab Charles Investment Management Inc. now owns 393,417 shares of the technology company’s stock worth $24,274,000 after purchasing an additional 203,417 shares during the last quarter. State of Wisconsin Investment Board raised its stake in shares of DST Systems by 85.8% in the second quarter. State of Wisconsin Investment Board now owns 12,204 shares of the technology company’s stock worth $753,000 after purchasing an additional 5,637 shares during the last quarter. Finally, State Board of Administration of Florida Retirement System raised its stake in shares of DST Systems by 103.7% in the second quarter. State Board of Administration of Florida Retirement System now owns 95,378 shares of the technology company’s stock worth $5,885,000 after purchasing an additional 48,562 shares during the last quarter. Hedge funds and other institutional investors own 85.71% of the company’s stock.

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DST Systems Company Profile

DST Systems, Inc (DST) is a provider of technology-based information processing and servicing solutions. The Company offers its solutions through data management, business processing and customer communications solutions to clients within the asset management, brokerage, retirement and healthcare markets.

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