Total System Services (NYSE:TSS) and Nielsen (NYSE:NLSN) are both business services companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, earnings, profitability, valuation, analyst recommendations and institutional ownership.
This table compares Total System Services and Nielsen’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Total System Services||15.93%||30.28%||10.28%|
Institutional & Insider Ownership
75.5% of Total System Services shares are owned by institutional investors. 2.4% of Total System Services shares are owned by company insiders. Comparatively, 0.4% of Nielsen shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Total System Services and Nielsen’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Total System Services||$4.93 billion||3.11||$586.18 million||$3.22||26.10|
|Nielsen||$6.57 billion||1.37||$429.00 million||$2.11||12.03|
Total System Services has higher earnings, but lower revenue than Nielsen. Nielsen is trading at a lower price-to-earnings ratio than Total System Services, indicating that it is currently the more affordable of the two stocks.
Total System Services pays an annual dividend of $0.52 per share and has a dividend yield of 0.6%. Nielsen pays an annual dividend of $1.40 per share and has a dividend yield of 5.5%. Total System Services pays out 16.1% of its earnings in the form of a dividend. Nielsen pays out 66.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Nielsen has raised its dividend for 4 consecutive years. Nielsen is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of recent ratings and target prices for Total System Services and Nielsen, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Total System Services||0||7||15||0||2.68|
Total System Services currently has a consensus price target of $96.72, suggesting a potential upside of 15.08%. Nielsen has a consensus price target of $29.67, suggesting a potential upside of 16.84%. Given Nielsen’s higher probable upside, analysts plainly believe Nielsen is more favorable than Total System Services.
Volatility and Risk
Total System Services has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500. Comparatively, Nielsen has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500.
Total System Services beats Nielsen on 13 of the 17 factors compared between the two stocks.
About Total System Services
Total System Services, Inc. provides payment processing, merchant, and related payment services to financial and nonfinancial institutions worldwide. The company operates through three segments: Merchant Solutions, Issuer Solutions, and Netspend. It offers general purpose reloadable prepaid and payroll cards, demand deposit accounts, and other financial service solutions to the underbanked and other consumers and businesses. The company also provides third party processing and related services for credit card issuers, merchant acquirers, independent sales organizations, and financial institutions; and issuer processing services, as well as operates as a prepaid program manager. Total System Services, Inc. was founded in 1982 and is headquartered in Columbus, Georgia.
Nielsen Holdings plc, together with its subsidiaries, operates as an information and measurement company. It operates through Buy and Watch segments. The company provides media and marketing information, analytics, and manufacturer and retailer expertise about what and where consumers buy, read, watch, and listen. The Buy segment provides retail transactional measurement data, consumer behavior information, and analytics primarily to businesses in the consumer packaged goods industry. This segment provides data on retail measurement services, such as market share and competitive sales volumes; insights into distribution, pricing, merchandising, and promotion; consumer panel measurement, which offers insight into shopper behavior and customer segmentation; and consumer intelligence and analytical services for decision making in product development and marketing cycles. The Watch segment provides viewership and listening data, and analytics primarily to the media and advertising industries for television, radio, print, online, and mobile viewing, and listening platforms. This segment offers television audience measurement services; audio audience measurement services; digital audience measurement services, such as digital media and market research, audience analytics, and social media measurement; mobile measurement services comprising measurement and consumer research for telecom and media companies; and total audience measurement services, as well as advertising solutions. The company was formerly known as Nielsen N.V. and changed its name to Nielsen Holdings plc in August 2015. Nielsen Holdings plc was founded in 1923 and is headquartered in Oxford, the United Kingdom.
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