ATM makers gain from focus on services

Article Excerpt

Diebold and NCR continue to expand the services they offer clients. That cuts their reliance on selling new ATMs and enhances their long-term profitability. NCR CORP. $39 (New York symbol NCR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 121.1 million; Market cap: $4.7 billion; Priceto-sales ratio: 0.8; No dividends paid; TSINetwork Rating: Average; www.ncr.com) makes automated teller machines (ATMs), cash registers, self-serve checkouts and kiosks for theatres and arenas. In late 2015, private-equity firm Blackstone Group (New York symbol BX) purchased $820 million worth of NCR’s preferred shares, which can be converted to common shares at $30.00 each. If converted, all of these preferred shares would equal roughly 20% of NCR. Blackstone recently agreed to sell about half of its holdings, which caused NCR’s stock to drop from around $50 to its current price. However, the company’s outlook remains bright. NCR continues to expand its software and services, which are more profitable than making ATMs and other equipment. As a result, its…