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Fidelity National Hikes Dividend & Expands Buyback

Fidelity National Information Services Inc. (FIS) is a leading provider of technology solutions for merchants, banks and capital market firms around the world.

The company generated revenue from Merchant Solutions (30%), Banking Solutions (47%), Capital Markets Solutions (20%), and Corporation and Other (3%) during the fourth quarter of 2020. With the acquisition of Worldpay in 2019, the company significantly bolstered its operations and expanded its international presence into non-U.S. regions.

Mixed Earnings Amid COVID-19

The COVID-19 pandemic continues to negatively impact Fidelity National’s performance. With government lockdowns and other pandemic-related challenges, merchant payment volumes and transaction volumes remain depressed, and to a lesser extent, transaction volumes within the banking solutions business remain lower than they would be otherwise.

The company reported fourth-quarter revenue that fell by 0.6% to $3.32 billion, missing consensus estimates by $10 million, with non-GAAP earnings of $1.62 per share, beating consensus estimates by six cents. While organic revenue was flat, short-term cost actions and synergies with the Worldpay acquisition improved the bottom line.

Despite these challenges, the company raised its quarterly dividend by 11.4% to $0.39 per share, which represents a 1.14% forward yield. The dividend is payable on March 26, 2021 to shareholders on record as of March 12, 2021. In addition, the board approved a share repurchase program of up to 100 million shares of Class A common stock.

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