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- A Big Mac Quarter?
Independent Buy-Side Research By The-Adviser.com -
is MD Porcelain) 10/16/00 New
York - Diebold continues to hold its presence in the US ATM
Diebold recently announced that it had entered into a deal with McDonald's Corporation to place automated teller machines (ATMs) in various McDonald's restaurants across the United States. Under this deal, Diebold will install and operate a cash dispenser in McDonald's locations which allows restaurant staff to load and recycle cash without accessing the chest of the unit by depositing money directly into the ATM by way of a bill acceptor. In return, McDonald's will pay Diebold a monthly fee for the installation and maintenance of the ATMs. The customer will be charged a per transaction fee a portion of which will be donated to the Ronald McDonald House. We believe the deal is exciting because it represents another outlet and business model for the placement of ATM machines.
Diebold had increased from $22 to $28 since our original report in December of 1999 before dropping to its recent price of $24 as the market corrected.
We continue to recommend Diebold based on the following investment themes: 1) Diebold is trading at earnings expectations. The stock currently trades at 12x EPS estimates which is BELOW its 16% 10 year compound annual growth rate, 2) The stock pays a dividend yield of 2.6% and has room for the upside, 3) new trends toward value based growth stocks should focus increased attention to Diebold.
We have lowered our Q3 estimates by a penny to reflect a stronger US dollar and weak EURO. We expect Q3 results to be strong.
Our EPS Estimates are as follows:
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We like the 2.6% dividend payment and continued international expansion.
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