Alliance Data Systems Corporation (NYSE: ADS) and CBIZ (NYSE:CBZ) are both business services companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.
Institutional and Insider Ownership
96.1% of Alliance Data Systems Corporation shares are owned by institutional investors. Comparatively, 85.6% of CBIZ shares are owned by institutional investors. 2.6% of Alliance Data Systems Corporation shares are owned by insiders. Comparatively, 6.9% of CBIZ shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Alliance Data Systems Corporation pays an annual dividend of $2.08 per share and has a dividend yield of 0.9%. CBIZ does not pay a dividend. Alliance Data Systems Corporation pays out 23.7% of its earnings in the form of a dividend.
This is a breakdown of recent recommendations and price targets for Alliance Data Systems Corporation and CBIZ, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Alliance Data Systems Corporation||3||7||10||0||2.35|
Alliance Data Systems Corporation presently has a consensus target price of $253.44, indicating a potential upside of 12.55%. Given Alliance Data Systems Corporation’s higher possible upside, equities analysts clearly believe Alliance Data Systems Corporation is more favorable than CBIZ.
Risk and Volatility
Alliance Data Systems Corporation has a beta of 1.76, indicating that its stock price is 76% more volatile than the S&P 500. Comparatively, CBIZ has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500.
Valuation and Earnings
This table compares Alliance Data Systems Corporation and CBIZ’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Alliance Data Systems Corporation||$7.41 billion||1.69||$1.47 billion||$8.78||25.65|
|CBIZ||$831.05 million||0.99||$91.52 million||$0.83||18.25|
Alliance Data Systems Corporation has higher revenue and earnings than CBIZ. CBIZ is trading at a lower price-to-earnings ratio than Alliance Data Systems Corporation, indicating that it is currently the more affordable of the two stocks.
This table compares Alliance Data Systems Corporation and CBIZ’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Alliance Data Systems Corporation||6.77%||59.67%||3.74%|
Alliance Data Systems Corporation beats CBIZ on 12 of the 15 factors compared between the two stocks.
Alliance Data Systems Corporation Company Profile
Alliance Data Systems Corporation is a provider of data-driven marketing and loyalty solutions serving consumer-based businesses in a range of industries. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. The Company operates through three segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company’s Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty); Epsilon, which provides end-to-end, integrated direct marketing solutions, and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company’s private label and co-brand retail credit card programs.
CBIZ Company Profile
CBIZ, Inc. (CBIZ) is engaged in the professional services business. The Company operates its professional services business through acquiring and integrating accounting and financial service providers, group health benefits consulting firms, property and casualty brokerage firms, payroll service providers, and valuation and other service firms throughout the United States. Its segments include Financial Services, Benefits and Insurance Services, National Practices, and Corporate and Other. The Financial Services group includes accounting and tax, government healthcare consulting, financial advisory, valuation, and risk and advisory services. The Benefits and Insurance Services group includes group health benefits consulting, payroll, property and casualty, and retirement plan services. The National Practices segment includes managed networking and hardware services, and healthcare consulting.
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