ATM makers Diebold (DBD) and NCR Corp. (NCR) are doing exceptionally well with year to date gains exceeding those of both Microsoft (MSFT) as well as Apple (AAPL). Diebold and NCR Corp. are the two largest companies selling teller machines and the services required to operate them.
With all of the identity theft occurring, financial institutions have been looking towards new technological advancements to help defend and hopefully prevent criminals from exploiting our conveniently located cash dispensaries known as ATMs. The latest ATMs will attempt to thwart criminals intent on stealing important financial information by adding a layer of protection which utilizes technology such as vein pattern recognize software in addition to storing important data at another location.
Between the two ATM makers, Diebold and NCR, it could be that this sudden surge in demand for ATMs could inadequately sustain the two and one will eventually disappoint investors.
On December 31 of last year, 3% of David Einhorn’s Greenlight Capital was carefully invested in NCR so it should come as no surprise that the stock is considered a universal hold or greater. While the stock is a bit too pricey for most of today’s buyers, NCR appears to be continue to be a solid investment.
Seems as if cash isn’t much of an issue for NCR as the company recently made an agreement with Coinstar (CSTR) to part with the division that made self-serve DVD rental kiosks. The agreement landed $100 million in NCR’s pocket while Coinstar obtained a division of their company that was losing money. This sudden increase in available cash in addition to recently reported gains in underlying profit, a growing backlog of future business, the recent surge in demand for ATMs and their related services, and the fact that their restaurant and grocery store check-out scanners have been profitable makes NCR appear to be quite the solid investment at this time. Analysts are expecting a roughly 25% earnings growth for the 2012 year.
Diebold on the other hand is receiving mostly hold recommendation from analysts watching the stock. With strong fundamentals and cheap shares, NCR makes up for their $2.36 billion market cap (roughly two-thirds of NCR’s $3.45 billion) and is widely accepted as a hold at this time.
One big difference between the two ATM makers, Diebold and NCR, is the fact that NCR’s dividends yield roughly 3% where NCR pays no dividend.