DST-Charles Schwab Announce Pact - Analyst Blog
21 Mars 2013 - 10:40AM
Zacks
Information and delivery services
provider DST Systems Inc. (DST) recently sealed a
multi-year deal with San Francisco-based brokerage firm Charles
Schwab & Co. Inc. The firm is a subsidiary of Charles
Schwab Corp. (SCHW). Financial terms of the deal were not
disclosed.
Charles Schwab provides financial services (securities brokerage,
banking, money management and financial advisory services) to
individual investors and independent investment advisors. It
manages 8.8 million active brokerage accounts, 1.6 million
corporate retirement plan participants, 874,000 banking accounts,
and $2.01 trillion in client assets as of Jan 31, 2013.
DST will be responsible for managing, printing and delivering
investment-related documents, as well as bank and tax statements.
Also, DST will help Charles Schwab in producing electronic
statements and their efficient distribution to its clients. DST’s
services will be provided by its Customer Communications
segment.
Winning the deal was not easy for DST and it had to prove the
benefits of its services for the brokerage house. Contended by
DST’s presentation and realizing its cost effectiveness, Charles
Schwab opted for the Customer Communications solutions.
DST’s Customer Communications Segment helps businesses to improve
operational performances across sales, marketing, customer service,
technology, finance, operations and compliance. The segment offers
digital print, electronic solutions, direct marketing and on-line
marketing services.
The Customer Communications segment was formerly known as Output
Solutions but was renamed during the fourth quarter 2012 results to
reflect its product offerings more appropriately (previously the
segment used to deal in physical output solutions, but now offers
data management and insight, electronic and physical
communication). DST also acquired Newkirk Products, Inc. in May
2011 to expand its operations in North America.
We see a lot of potential for the Customer Communications
segment due to its association with Charles Schwab as its success
with the output solutions could fetch similar deals, going
forward.
DST’s fourth quarter performance was encouraging with the top and
bottom lines surpassing the Zacks Consensus Estimates. We are
bullish on the stock due to its continuous share buybacks,
accretions from the acquisitions, improving trend in businesses and
wide exposure in the insurance vertical.
Currently, DST has a Zacks Rank #2 (Buy). Investors should also
look for similar stocks such as Pegasystems Inc.
(PEGA) and Pervasive Software Inc. (PVSW), which
carry a Zacks Rank #1 (Strong Buy) and are worth buying.
DST SYSTEMS (DST): Free Stock Analysis Report
PEGASYSTEMS INC (PEGA): Free Stock Analysis Report
PERVASIVE SOFTW (PVSW): Free Stock Analysis Report
SCHWAB(CHAS) (SCHW): Free Stock Analysis Report
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