This smaller cap company is somewhat off the radar but will see a large tax reform benefit. Green Dot Corp. (NYSE: GDOT) is a pro-consumer financial technology innovator. The company is a provider of reloadable prepaid debit cards and cash reload processing services in the United States.
The company’s Account Services segment includes branded deposit account programs, including Green Dot-branded and affinity-branded general purpose reloadable card accounts, checking accounts, open-loop gift cards and secured credit cards.
Green Dot’s Processing and Settlement Services include its money processing services, which consists of reload services and 1099 disbursements, and its tax refund processing services. It also has operations in the mobile technology and mobile banking with GoBank mobile checking account.
The company’s tax rate is expected to drop from 35.6%. The Jefferies team thinks that can raise earnings almost 13%.
The $73 Jefferies price target compares with the consensus target of $63.50. The stock was last seen at $62.00 a share.
This is another smaller company that looks to be a big winner from tax reform. WEX Inc. (NYSE: WEX) is a provider of corporate payment solutions. It operates through three segments. The Fleet Solutions segment provides customers with payment and transaction processing services designed for the needs of commercial and government fleets.
The Travel and Corporate Solutions segment focuses on the complex payment environment of business-to-business payments, providing customers with payment processing solutions for their corporate payment and transaction monitoring needs.
The Health and Employee Benefit Solutions segment provides health care payment products and software as a service consumer directed platforms, as well as payroll related benefits to customers in Brazil.
The company’s tax rate is expected to drop from 36.3%, which Jefferies thinks can raise earnings for this company almost 13%.
Jefferies has set its price target at $149, while the consensus target is $135.80. The stock traded at $139.15.
These four top companies that should all see double-digit earnings per share gains if the tax reform is passed in the current form. All are good additions to growth accounts with a longer term horizon and a touch more risk tolerance.
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