Deluxe Corporation (DLX) | Investment Case

1. Company Snapshot

1.a. Company Description

Deluxe Corporation provides technology-enabled solutions to enterprises, small businesses, and financial institutions in the United States, Canada, Australia, South America, and Europe.It operates through four segments: Payments, Cloud Solutions, Promotional Solutions, and Checks.The company provides treasury management solutions, including remittance and lockbox processing, remote deposit capture, receivables management, payment processing, and paperless treasury management solutions, as well as payment exchange, and fraud and security services; web hosting and design services, data-driven marketing solutions and hosted solutions, such as digital engagement, logo design, financial institution profitability reporting, and business incorporation services.

It also offers business forms, accessories, advertising specialties, promotional apparel, and retail packaging services; and printed personal and business checks.The company was formerly known as Deluxe Check Printers, Incorporated and changed its name to Deluxe Corporation in 1988.Deluxe Corporation was founded in 1915 and is headquartered in Shoreview, Minnesota.

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1.b. Last Insights on DLX

Deluxe Corporation's recent performance was driven by strong Q2 2025 earnings, beating the Zacks Consensus Estimate of $0.71 per share with $0.88 per share. The company's acquisition of CheckMatch from Kinexys by J.P. Morgan expanded its Deluxe Payment Network (DPN) solution, enhancing its digital lockbox payments capability. This strategic move aligns with the company's focus on expanding its payment solutions, positioning Deluxe for continued growth and success.

1.c. Company Highlights

Last Price	20.64
Change Percentage	-1.57%
Open	20.87
Previous Close	20.97
Market Cap ( Millions)	929
Volume	146367
Year High	24.3
Year Low	13.61
M A 50	19.3
M A 200	17.19

FCF Yield	21.97%
Dividend Yield	5.81%
ROE	5.15%
Debt / Equity	56.15%
Net Debt / EBIDTA	566.06%
Price To Book	0.36
Price Earnings Ratio	11.38
Price To FCF	4.55
Price To sales	0.44
EV / EBITDA	9.35

2. Deluxe's Q3 2025 Earnings: A Strong Performance

Deluxe reported a robust third-quarter performance, with total revenue reaching $540.2 million, a 2.2% increase from the prior year. On a comparable adjusted basis, revenue growth was 2.5%, driven by a fourth consecutive quarter of double-digit year-over-year expansion in the Data segment. Adjusted EBITDA grew significantly faster than revenue, reaching $119 million, a 14% increase from the prior year, with margin rates expanding by over 200 basis points to 22% of revenue. Adjusted EPS came in at $1.09, beating estimates of $0.92, a nearly 30% year-over-year increase.

Publication Date: Nov -20

                                    📋 Highlights
                                    Strong Revenue and EBITDA Growth::
                                                Total revenue grew 2.2% YoY to $540.2M, while adjusted EBITDA surged 14% to $119M, driven by Data segment's 20%+ growth.
Margin Expansion::
                                                EBITDA margins expanded over 200 bps to 22% of revenue, with organic growth in all segments.
Deleveraging Progress::
                                                Net debt reduced by $44.5M to $1.42B, lowering net debt/EBITDA to 3.3x from 3.6x in 2024.
EPS Growth::
                                                Adjusted EPS rose 30% YoY to $1.09, with full-year guidance raised to $3.45–$3.60.
Free Cash Flow Momentum::
                                                Year-to-date cash flow up >25%, with updated guidance of $140–$150M, reflecting improved efficiency and lower restructuring costs.

                                

Segment Performance

The Merchant Services business grew revenues by 4.8% year-over-year to $98 million. The B2B segment revenues finished at $73.1 million, sequentially improving from the prior quarter but declining 2.7% versus the prior year result. The Data Solutions segment continued its revenue growth trajectory, driven by accelerating demand for core marketing campaign execution across key financial institution partners. As Barry McCarthy noted, "demand for core marketing campaign execution across key FI partners continued to accelerate."

Cash Flow and Leverage

Deluxe's strong earnings drove robust cash flow results, with year-to-date operating cash flows expanding by more than 25% versus the prior 9-month period. The company's net debt level decreased by $44.5 million to $1.42 billion, resulting in a net debt to adjusted EBITDA ratio of 3.3x, an improvement from 3.6x at the end of 2024. The company's liquidity and capital structure remain healthy, with over $390 million in available revolver capacity.

Valuation and Outlook

With a P/E Ratio of 10.27 and an EV/EBITDA of 8.99, Deluxe's valuation appears reasonable. The company's Dividend Yield stands at 6.44%, indicating a relatively attractive return for shareholders. For 2026, analysts estimate revenue growth at 1.0%. Deluxe's updated guidance includes adjusted EPS of $3.45 to $3.60, reflecting 6% to 10% comparable adjusted growth. The company's focus on improving free cash flow conversion, deleveraging, and investing in high-return growth opportunities should support its long-term strategy.

3. NewsRoom

Ensign Peak Advisors Inc Sells 9,300 Shares of Deluxe Corporation $DLX

Dec -01

Source: defenseworld.net

Meet 33 Ideal "Safer" November Small/MidCap Value DiviBuys Of The S&P600

Nov -26

Source: seekingalpha.com

Deluxe President and CEO Barry C. McCarthy Honored with Lifetime Achievement Award from Technology Association of Georgia

Nov -14

Source: businesswire.com

Deluxe (DLX) Beats Q3 Earnings and Revenue Estimates

Nov -06

Source: zacks.com

Deluxe Corporation (DLX) Q3 2025 Earnings Call Transcript

Nov -06

Source: seekingalpha.com

Deluxe Corporation Third Quarter 2025 Financial Results Available on Company's Website

Nov -05

Source: businesswire.com

Teacher Retirement System of Texas Makes New Investment in Deluxe Corporation $DLX

Nov -05

Source: defenseworld.net

Deluxe to Report Third Quarter 2025 Results on November 5, 2025

Oct -22

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.16%)

6. Segments

Checks

Expected Growth: 1.2%

Deluxe Corporation's 1.2% growth is driven by increasing demand for digital payment solutions, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on small businesses and financial institutions has led to increased sales of checks and other payment products, contributing to its growth.

Payments

Expected Growth: 0.8%

Deluxe Corporation's 0.8 growth is driven by increasing demand for digital payment solutions, expansion into new markets, and strategic partnerships. Additionally, the company's focus on innovation, cost savings initiatives, and effective pricing strategies have contributed to its growth.

Promotional Solutions

Expected Growth: 1.5%

Deluxe Corporation's Promotional Solutions segment growth of 1.5% is driven by increasing demand for digital marketing solutions, expansion into new markets, and strategic partnerships. Additionally, the segment benefits from Deluxe's strong brand recognition, innovative product offerings, and cost savings initiatives. These factors contribute to the segment's steady growth, despite intense competition in the promotional products industry.

Data Solutions

Expected Growth: 1.3%

Deluxe Corporation's 1.3% growth in Data Solutions is driven by increasing demand for digital transformation, rising adoption of cloud-based services, and growing need for data analytics and insights. Additionally, Deluxe's strategic acquisitions and investments in emerging technologies, such as artificial intelligence and machine learning, are contributing to its growth momentum.

7. Detailed Products

Checks and Accessories

Deluxe Corporation provides a wide range of checks and accessories, including business checks, personal checks, and accessories such as checkbook covers and check registers.

Website Development and Hosting

Deluxe Corporation offers website development and hosting services, enabling businesses to establish an online presence and reach a wider audience.

Search Engine Optimization (SEO) and Marketing

Deluxe Corporation provides SEO and marketing services, helping businesses improve their online visibility and drive more traffic to their websites.

Logo Design and Branding

Deluxe Corporation offers logo design and branding services, enabling businesses to establish a strong brand identity and differentiate themselves from competitors.

Print and Digital Marketing Materials

Deluxe Corporation provides a range of print and digital marketing materials, including business cards, brochures, and flyers.

Merchant Services

Deluxe Corporation offers merchant services, enabling businesses to process payments and manage their transactions efficiently.

Web Design and Development

Deluxe Corporation provides web design and development services, helping businesses to create custom websites that meet their unique needs.

8. Deluxe Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Deluxe Corporation operates in a niche market with limited substitutes, but the threat of digital alternatives is increasing.

Bargaining Power Of Customers

Deluxe Corporation's customers are primarily small businesses and financial institutions, which have limited bargaining power.

Bargaining Power Of Suppliers

Deluxe Corporation relies on a few large suppliers for paper and ink, which gives them some bargaining power, but the company's scale and diversification mitigate this risk.

Threat Of New Entrants

The barriers to entry in Deluxe Corporation's market are relatively high, with significant capital expenditures required to establish a competitive business.

Intensity Of Rivalry

Deluxe Corporation operates in a highly competitive market with several established players, leading to intense rivalry and pricing pressure.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	72.49%
Debt Cost	11.30%
Equity Weight	27.51%
Equity Cost	11.30%
WACC	11.30%
Leverage	263.46%

11. Quality Control: Deluxe Corporation passed 2 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Deluxe

A-Score: 5.8/10

Value: 7.9

Growth: 3.3

Quality: 4.6

Yield: 9.0

Momentum: 5.0

Volatility: 4.7

1-Year Total Return ->

Steel Connect

A-Score: 5.6/10

Value: 9.3

Growth: 4.7

Quality: 6.6

Yield: 0.0

Momentum: 8.5

Volatility: 4.3

1-Year Total Return ->

Townsquare Media

A-Score: 5.5/10

Value: 9.3

Growth: 3.7

Quality: 4.6

Yield: 9.0

Momentum: 1.0

Volatility: 5.3

1-Year Total Return ->

Emerald Holding

A-Score: 4.4/10

Value: 4.2

Growth: 2.9

Quality: 6.5

Yield: 1.0

Momentum: 7.0

Volatility: 4.7

1-Year Total Return ->

Inuvo

A-Score: 4.1/10

Value: 6.2

Growth: 3.9

Quality: 4.5

Yield: 0.0

Momentum: 9.0

Volatility: 1.0

1-Year Total Return ->

Harte Hanks

A-Score: 3.8/10

Value: 9.2

Growth: 1.1

Quality: 4.3

Yield: 0.0

Momentum: 5.0

Volatility: 3.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

2.39%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

11.30%

Deluxe Corporation - US2480191012

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on DLX

1.c. Company Highlights

Higher Yield

Stable Momentum

Medium Volatility

Earnings Beats

Revenues Beats

Fairly Valued

Revenues Miss

Cheaper

Weak Momentum

Average Growth

2. Deluxe's Q3 2025 Earnings: A Strong Performance

Segment Performance

Cash Flow and Leverage

Valuation and Outlook

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.16%)

6. Segments

Checks

Expected Growth: 1.2%

Payments

Expected Growth: 0.8%

Promotional Solutions

Expected Growth: 1.5%

Data Solutions

Expected Growth: 1.3%

7. Detailed Products

Checks and Accessories

Website Development and Hosting

Search Engine Optimization (SEO) and Marketing

Logo Design and Branding

Print and Digital Marketing Materials

Merchant Services

Web Design and Development

8. Deluxe Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Deluxe Corporation passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

20.64$

Current Price

20.64$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA