Payments stocks on the whole have outperformed the market so far in 2017, and Goldman Sachs analysts wrote Tuesday that it’s hard to find value in the sector looking ahead to the new year. The Goldman analysts, led by Tien-tsin Huang, are “sticking with their preference” for companies that have heavy exposure to digital, money to make acquisitions, and opportunities for margin expansion. PayPal Holdings Inc. , Square Inc. , and Global Payments Inc. fit those characteristics, according to the analysts. However, they acknowledge that these stocks have “high valuations and low margin for error.” Therefore, the firm’s top picks for 2018 are Mastercard Inc. , which Goldman deems likely to “at least maintain earnings-per-share growth,” and FleetCor Technologies , which recently completed a “materially accretive acquisition.” Mastercard shares have gained 46% so far this year, while FleetCor’s stock is up 34%. The S&P 500 Index has risen 19% in that time.
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