Newtek Business Services Corp. (NASDAQ: NEWT) and Planet Payment (NASDAQ:PLPM) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, profitability, dividends, analyst recommendations, earnings, institutional ownership and valuation.
Newtek Business Services Corp. pays an annual dividend of $1.60 per share and has a dividend yield of 9.2%. Planet Payment does not pay a dividend. Newtek Business Services Corp. pays out 85.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Risk & Volatility
Newtek Business Services Corp. has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500. Comparatively, Planet Payment has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500.
This table compares Newtek Business Services Corp. and Planet Payment’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Newtek Business Services Corp.||81.35%||7.97%||4.23%|
Earnings and Valuation
This table compares Newtek Business Services Corp. and Planet Payment’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Newtek Business Services Corp.||$35.85 million||8.45||$2.91 million||$1.88||9.24|
|Planet Payment||$52.79 million||3.80||$12.12 million||$0.47||8.55|
Planet Payment has higher revenue and earnings than Newtek Business Services Corp.. Planet Payment is trading at a lower price-to-earnings ratio than Newtek Business Services Corp., indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and target prices for Newtek Business Services Corp. and Planet Payment, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Newtek Business Services Corp.||0||2||1||0||2.33|
Newtek Business Services Corp. presently has a consensus price target of $17.00, indicating a potential downside of 2.13%. Given Newtek Business Services Corp.’s higher probable upside, equities research analysts plainly believe Newtek Business Services Corp. is more favorable than Planet Payment.
Insider and Institutional Ownership
22.8% of Newtek Business Services Corp. shares are owned by institutional investors. Comparatively, 54.0% of Planet Payment shares are owned by institutional investors. 6.7% of Newtek Business Services Corp. shares are owned by company insiders. Comparatively, 20.2% of Planet Payment shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Planet Payment beats Newtek Business Services Corp. on 9 of the 15 factors compared between the two stocks.
About Newtek Business Services Corp.
Newtek Business Services Corp. is an internally managed non-diversified closed-end management investment company. The Company’s investment objective is to generate both current income and capital appreciation primarily through loans originated by its small business finance platform and its equity investments in certain portfolio companies that it controls. The Company is a national non-bank lender that provides, together with its controlled portfolio companies, a range of business services and financial products under the Newtek brand to the small and medium-sized business (SMB) market. The Company issues debt and makes equity investments in portfolio companies in various industries. Its products and services include Business Lending including the United States Small Business Administration (SBA) 7(a) and 504 lending, Electronic Payment Processing, Managed Technology Solutions (Cloud Computing), Data Backup, and Payroll and Benefits Solutions to SMB accounts across all industries.
About Planet Payment
Planet Payment, Inc. is a provider of international payment and transaction processing and multi-currency processing services. The Company operates through two segments: multi-currency processing services and payment processing services. Its multi-currency processing services segment includes Pay In Your Currency, Multi-Currency Pricing and Dynamic Currency Conversion at automated teller machines, enable merchants to offer customized pricing in multiple currencies. Its payment processing services consist of end-to-end authorization, capture, clearing and settlement services to its customers along with localized language support and online access to reconciliation, reporting and analytics services. It provides its services to approximately 118,000 active merchant locations in over 20 countries and territories across the Asia Pacific region, the Americas, the Middle East, Africa and Europe, primarily through its acquiring bank and processor customers.
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