Many people will wonder if Meta Financial Group Inc. (NASDAQ: CASH) is a growing value investment. Interest in Meta Financial (CASH) is growing because Meta owns Meta Bank.
MetaBank NA is the organization that issues the Coinbase Card, Coinbase’s Visa Debit Card. Interest in the Coinbase Card is high because Coinbase automatically converts cryptocurrency into US Dollars.
Holders can use the Coinbase Card to get cash from ATMs and make purchases at stores. In addition, the Coinbase Card will pay holders cash 1% back in Bitcoin (BTC) and 4% back in Stellar Lumens (XLM).
I think the Coinbase Card will be popular because using it will not affect your credit score. The Coinbase Card has no effect on credit scores because it is a debit card. Additionally, there are no Coinbase Card application fees.
A Financial Giant You are Unaware of
Additionally, MetaBank NA is the U.S. Treasury’s financial agent for some stimulus payments, Money reports. Hence, the Internal Revenue Service (IRS) hired MetaBank to issue Economic Impact Payment (EIP) cards that send stimulus money to hundreds of thousands of Americans.
Therefore, Meta Financial (CASH) is a financial services and Fintech giant few people are aware of. Thus, Meta could be a classic value investment.
Debit cards are a growing business. In 2018, Statista estimates there were 5.36 billion debit cards in the United States in 2021. Similarly, the Federal Reserve estimates that Americans made 174.2 billion noncash (electronic) payments in 2018. That number grew from 30.6 billion in 2015.
Moreover, Americans made $97.04 trillion in non-cash payments in 2018, the Federal Reserve estimates. The value of non-cash payments grew from $10.25 trillion in 20
MetaBank profits from that growth because debit cards are a popular form of non-cash payments. Notably, the Coinbase Card supports ATM, Google Pay, Apple Pay, and point-of-sale (POS) transactions.
Plus, MetaBank sells a product that most Americans use, debit cards. In addition, new uses for that product such as the EIP Card and the Coinbase Card keep appearing.
Is Meta Financial Making Money?
Meta Financial Group (CASH) makes some money from its cards. For example, Meta reported a quarterly gross profit of $187.30 million and a quarterly operating income of $61.60 million on 31 March 2021.
Strangely, Meta Financial’s quarterly gross profit and quarterly revenues fell from $188.25 million on 31 March 2020. Conversely, Meta’s quarterly operating income rose from $59.73 million on 31 March 2020.
Notably, Stockrow estimates Meta’s quarterly revenues grew by 10.85% in the quarter ending on 31 March 2021. I credit the EIP cards the IRS sent for coronavirus stimulus for the revenue growth. Notably, Meta’s quarterly revenues shrank by 12.58% in the quarter ending on March 31, 2020.
How Much Cash does Meta Financial Generate?
Notably, Meta’s quarterly operating cash flow grew from $139.06 million on 31 March 2020 to $149.68 million on 31 March 2021.
Additionally, Meta reported a quarterly financing cash flow of $2.4 billion and an ending cash flow of $2.137 billion on 31 March 2021. The quarterly financing cash flow grew from -$120.11 million on 31 March 2020. Similarly, the quarterly ending cash flow rose from $-43.46 million on 31 March 2020.
Therefore, Meta Financial can generate enormous amounts of cash. Impressively, Meta Financial Corp’s cash and short-term investments grew from $108.73 million on 31 March 2020 to $3.724 billion on 31 March 2021.
Appealingly, Meta Financial’s Total Debt fell from $957 million on 31 March 2020 to $133 million on 31 March 2021. Meta Financial paid debt because the cash from financing comes from its Commercial Finance and Consumer Finance divisions.
My suspicion is that Meta Financial’s lending grew during the pandemic because people and businesses needed credit to survive the COVID-19. Notably, Meta’s lending products include insurance premium finance loans, asset based financing, consumer installment loans, Small Business Administration (SBA) and US Department of Agriculture (USDA) loans.
What Value does Meta Financial Have?
Meta Financial Group’s (NYSE: CASH) value is growing. For example, Meta’s total assets grew from $5.844 billion on 31 March 2020 to $9.79 billion on 31 March 2021. Thus, Meta’s total assets grew by $3.946 billion in a year.
Similarly, Meta Financial Group’s share value rose from $18.15 on 15 June 2020 to $53.43 on 16 June 2021. Hence, I consider Meta Finance a cash-rich growth stock that offers an enormous margin of safety because of all the growth.
Additionally, Meta Financial will pay a 5¢ quarterly dividend on 1 July 2021. Overall, Meta offered a forward annualized dividend of 20¢ and a dividend yield of 0.38% on 16 June 2021.
Plus, Meta could be an excellent way to cash in on cryptocurrency. On 16 July 2021 Mr. Market paid $53.43 for Meta (CASH) and $228.05 for Coinbase Global Inc. (NASDAQ: COIN). I think Meta will make money from the Coinbase Card.
If you are seeking a cheap Fintech stock with enormous growth potential that generates enormous amounts of cash, you need to examine Meta Financial. I think Meta could be one of the best value investments in financial technology.