A good piece of advice for people looking for promising investments is to look around themselves.

If you're a nurse, consider companies offering products and services to the health-care industry, such as Medtronic (NYSE:MDT) and Pfizer (NYSE:PFE). If you're a race car driver, consider auto makers and related companies, such as Toyota (NYSE:TM) and ExxonMobil (NYSE:XOM). Cat burglars might look into firms that make black knit caps, lock-loosening solutions, and suction cups.

It all makes sense -- familiar firms will likely be easier for us to research, understand, and keep up with because we already have some interest in them. Plus, we've got a head start. If you're looking at Home Depot (NYSE:HD), you probably don't need to spend much time learning what it does, how widespread its operations are, and whether consumers are receptive to it. (Of course, such familiarity is never enough. It serves as a great introduction, but you still need to dig much deeper into a company's financial reports, for example, in order to assess its health and promise.)

A hidden diamond
One thing to keep in mind, though, is that there are fascinating companies just out of the radar range of most people -- often, if we'd only look a little closer, we'd see them. One such company is First Data (NYSE:FDC). You'd do well to learn more about it, as it might warrant a berth in your portfolio.

First Data is likely by your side every day, when you buy gas and groceries, eat out, order Partridge Family CDs online, or wire money to your nephew whose currency miscalculations led him to run out of cash on his Uzbekistan backpacking trip.

In its own words, First Data...

... helps power the global economy. As an electronic commerce and payment services company, First Data serves approximately 3 million merchant locations, 1,400 card issuers and millions of consumers, making it easy, fast and secure for people and businesses to buy goods and services using virtually any form of payment. With 29,000 employees worldwide, the company provides credit, debit, smart card and stored-value card issuing and merchant transaction processing services; Internet commerce solutions; money transfer services; money orders; and check processing and verification services throughout the United States. First Data also offers a variety of payment services in the United Kingdom, Australia, Canada, Japan, Mexico, Spain, the Netherlands, the Middle East and Germany. Its Western Union and Orlandi Valuta money transfer networks include approximately 169,000 Agent locations in more than 195 countries and territories.

Impressive, eh?

Reasons to love it
So, why might you want to consider First Data as an investment? Here are a few reasons:

  • It's big, with a market capitalization near $30 billion. And it's growing. Revenues in 2002 totalled $7.6 billion, up 15% over 2001, with net income of $1.9 billion in 2002. Earnings per share in 2002 rose 18% over year-earlier levels. Pretax annual cash flow is nearly $1 billion. Fourth quarter and 2003 results are set to be released very soon, on Feb. 3. The company is expanding in Asia, including the rather populous nation of China, so that bodes well, too.

  • It's dominant. Its Western Union unit boasts 75% of the money-transferring business (which is projected by some to be able to grow by nearly 20% per year over the next few years), and it processes some 40% of all Visa and MasterCard transactions.

  • It has fat profit margins. In the third quarter of 2003, operating margins rang in at 23%, with the company's two largest divisions, Payment Services and Merchant Services, delivering net profit margins of 35% and 27%, respectively.

  • Management doesn't appear complacent. In the 2002 annual report's letter to shareholders, CEO Charles Fote noted, "I like to remind those around me that our customers need us; however, we are not their only choice." It's always good to be vigilant about competitors.

  • It has a defensive moat around its businesses. A key sustainable advantage is inertia -- many of its customers would probably not want to bother changing providers because of the hassle involved.

  • It has lofty goals. For example: "To process every electronic payment transaction worldwide from the point of occurrence to the point of settlement." That's a nice mix of remaining focused on its core competence while ambitiously aiming for more.

  • It has many admirers. It was first in its industry in Fortune magazine's 2003 Most Admired Companies list. BusinessWeek rated it as the 43rd best-performing enterprise in America. Bill Nygren, manager of the well-respected mutual fund Oakmark Select (ticker: OAKLX), has recently beefed up his fund's holdings in First Data.

  • It has room for growth. For example, by the end of 2004, the company expects to have 200,000 Western Union agent locations, and it estimates that the world can sustain 300,000-500,000 of them. Since 1999, its number of agent locations has been growing by about 30% annually. Regarding the rest of its electronic payment businesses, just ask yourself, "Are people likely to be making more or fewer electronic payments in the future?" (I thought so, too.)

  • It doesn't appear wildly overvalued. In fact, its shares may even be near bargain level right now. Over the past five years, First Data price-to-earning (P/E) ratios have ranged from 11 to 36, and currently sits at around 22. Part of the reason for the somewhat depressed price is some hullabaloo over the company's planned merger with a competitor -- which has since been resolved.

A reason to worry?
Undoubtedly, few investments are perfect. A First Data drawback for many people might be one of the company's main businesses: credit cards. It supports an industry that has crippled many people financially. Of course, if you use credit cards responsibly, they're wonderfully convenient -- they're far from being purely evil. We at the Fool even try to help you get out of credit card debt, manage your credit intelligently, and find the best credit card for you in our Credit Center. (We even offer a Fool Credit Card!)

Further research
If you find yourself intrigued by this company, learn much more about it at its website. And be sure to poke through its financial statements. Its latest numbers are coming out next week. Learn about and consider its competitors, too. Jeff Fischer wrote about one, iPayment (NASDAQ:IPMT), a few months back. Drop by the First Data discussion board as well, to see what folks are saying about the company, or to ask any questions.

For additional investment ideas, presented with much more research, check out our suite of Fool stock newsletters.

Selena Maranjian thinks Lucky Charms cereal isn't just for kids. For more about Selena, view her bio and her profile . You might also be interested in these books she has written or co-written: The Motley Fool Money Guide andThe Motley Fool Investment Guide for Teens. The Motley Fool isFools writing for Fools.