investing

The Best Stock in South Carolina: Blackbaud

We analyzed publicly traded companies based in the Palmetto State to identify the best stock in South Carolina to buy now.

We scoured the nation to identify the best stock in every state. Blackbaud (symbol BLKB) is the publicly traded company we picked in South Carolina. The company headquarters is located in Charleston.

A word of caution: Since we selected a single stock from each state (plus one from D.C), and choices in some states are sparse, a few of our picks are best suited to investors comfortable with a higher degree of risk. This is not necessarily one of our 51 favorite stocks in the entire U.S., in other words.

Blackbaud by the Numbers

  • Headquarters: Charleston
  • Share price: $87.61
  • Market value: $4.2 billion
  • Price-earnings ratio: 40

(Prices and data are as of June 22, 2017)

Blackbaud develops and services software used by philanthropic, higher-education and nonprofit organizations to manage their finances and member relations.

None of the company’s competitors offer the extensive suite of services that Blackbaud does, giving the firm a significant edge, says Morningstar analyst Rodney Nelson. Because Blackbaud’s software handles complex processes, it’s costly and difficult for companies to switch to a competing service, and more than 90% of Blackbaud’s customers renew their service contracts annually. Blackbaud boasts a roster of more than 35,000 customers, and it has a massive revenue lead in what Nelson calls an “underpenetrated and expanding” market for such software sales, currently commanding $6.3 billion in annual revenues. In recent years, the firm has grown by acquisition in all of its markets. Analysts at Stifel are encouraged by recent financial results, with the company expanding year-over-year revenue growth while migrating customers away from traditional service contracts to its more profitable subscription-based cloud software. They rate Blackbaud a “buy” with a 12-month price target of $96.

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