DST Systems Inc.DST

Stock Research and Analysis

by Swami Shanmugasundaram

DST Systems is the largest provider of third-party mutual fund shareholder record-keeping services in the United States. The company's strength lies in the breadth of its product portfolio and its established relationships with major mutual fund companies. Read more

Bulls Say

DST currently has more than 50% of the outsourced mutual fund processing business, making it by far the leader in this industry.

A significant part of DST's revenues comes from long-term contracts, giving it good revenue visibility.

DST's foreign operations should help the company in the coming years as mutual fund investing continues to take root abroad.

Bears Say

DST derives more than three fourths of its revenue from the U.S. market, and any decline in the U.S. economy will materially and adversely affect the company's financials.

With roughly 33% of the business in each of DST's operating segments coming from just five clients, DST is very dependent on a small number of customers.

DST's business has long sales and conversion cycles. Even if the economy turned around today, results might not meaningfully improve for a couple of years. Read more

Strategy

DST leverages its scale advantage in the mutual fund processing business to compete on cost. It invests heavily in its technology and services to continually fine tune its product offerings. DST's management Read more

Management

Stewardship at DST has been fair in our opinion. DST is led by CEO Tom McDonnell, who has been with the company since 1971. Most of DST's other executives have extensive experience in the industry including long tenures at the company. Directors and Read more

Profile

DST provides information processing and computer software services to clients in the financial services, telecommunication, and health-care industries. It offers its services Read more

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