This Data Company Still Trades Like a Dying Printer

If you ask most investors what Deluxe (NYSE: DLX) does, they’ll probably say:

“Don’t they print checks?” That’s the problem … and the opportunity.

Yes, Deluxe built its reputation printing checks for banks and small businesses. And yes, check usage is in long-term decline. But that mental model is stuck in the past. 

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Today, Deluxe is far more than a legacy printer: it’s a small-business payments, marketing, and data infrastructure company … and it’s even our top-rated name in the advertising sector. But the market hasn’t fully caught up. Here’s what everyone is missing … and why this stock is scoring an A or Strong Buy according to our Zen Ratings system.

The Reinvention Story

Over the past several years, Deluxe has aggressively reshaped its business.

It now operates across three main areas:

• Merchant Services (payment processing for small and mid-sized businesses)
• Data Solutions (marketing/advertising, customer acquisition, analytics, fraud and risk tools)
• Print (the legacy segment)

Merchant Services and Data are the future. They generate recurring revenue tied to small-business financial operations: things like card processing, ACH payments, treasury management, marketing data, and fraud prevention.

This isn’t a flashy Silicon Valley fintech. It’s embedded infrastructure for banks and small businesses. And infrastructure tends to be sticky.

The legacy print business, meanwhile, isn’t disappearing overnight. Even though it sounds like a dying and unexciting vertical, the fact is that certain industries and government agencies still rely heavily on checks. That segment continues to produce meaningful cash flow … with relatively limited reinvestment required.

Which creates a powerful dynamic.

The Cash Engine Funding the Pivot

The print segment is effectively funding the transition.

Even as revenue gradually declines, margins remain healthy enough to generate strong free cash flow. Management has been using that cash to:

• Invest in higher-growth payments and data offerings
• Pay down debt
• Improve operating efficiency

That deleveraging story matters. DLX still trades like a levered value trap. But as debt comes down and cash flow remains stable, the equity starts to look less risky … and more like a steady compounder.

The Valuation Disconnect

Here’s the interesting part.

DLX trades at a low earnings multiple (we’re talking a forward PE of 7) and a strong free cash flow yield, largely because investors still view it as a shrinking printer. It’s no surprise it scores a B in our Value Component Grade. 

If it were valued purely as a payments and data company serving small businesses, the multiple would likely be higher. Instead, it sits in a gray zone: not “tech” enough for fintech investors, not distressed enough for deep value funds.

That disconnect is the thesis.

If Merchant Services and Data continue to offset print decline, and leverage keeps falling, the market’s perception can shift. You don’t need explosive growth. You need steady execution and cash generation.

And yet …  the growth is there, too. DLX also scores a B in our Growth Component Grade, which measures sales acceleration, EPS growth, profit margin improvement, and more. This means investors may avoid one of the top mistakes of growth stock investing, which is overpaying … because DLX is one of those rare GARP (Growth At a Reasonable Price) stock opportunities in the market today. 

The Bottom Line?

Deluxe isn’t exciting. It won’t headline AI conferences or dominate fintech podcasts. In fact, it’s a company everyone thinks is dying … but that’s the whole opportunity. It’s quietly reinvented itself into a payments and data platform that still throws off meaningful cash.

That’s why I think it’s a name to watch for value and growth investors alike. Click here to add DLX to your watchlist. 

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