First Data (NYSE:FDC) and Fidelity National Information Servcs (NYSE:FIS) are both large-cap business services companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.
This table compares First Data and Fidelity National Information Servcs’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Fidelity National Information Servcs||8.97%||20.66%||7.97%|
This is a summary of recent ratings and recommmendations for First Data and Fidelity National Information Servcs, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Fidelity National Information Servcs||0||3||17||0||2.85|
First Data currently has a consensus price target of $24.66, indicating a potential downside of 22.19%. Fidelity National Information Servcs has a consensus price target of $146.89, indicating a potential upside of 11.88%. Given Fidelity National Information Servcs’ stronger consensus rating and higher probable upside, analysts plainly believe Fidelity National Information Servcs is more favorable than First Data.
Fidelity National Information Servcs pays an annual dividend of $1.40 per share and has a dividend yield of 1.1%. First Data does not pay a dividend. Fidelity National Information Servcs pays out 26.8% of its earnings in the form of a dividend. Fidelity National Information Servcs has increased its dividend for 2 consecutive years.
Institutional and Insider Ownership
53.3% of First Data shares are owned by institutional investors. Comparatively, 92.7% of Fidelity National Information Servcs shares are owned by institutional investors. 4.9% of First Data shares are owned by insiders. Comparatively, 1.4% of Fidelity National Information Servcs shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Earnings & Valuation
This table compares First Data and Fidelity National Information Servcs’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|First Data||$9.50 billion||3.15||$1.01 billion||$1.21||26.19|
|Fidelity National Information Servcs||$8.42 billion||9.56||$846.00 million||$5.23||25.10|
First Data has higher revenue and earnings than Fidelity National Information Servcs. Fidelity National Information Servcs is trading at a lower price-to-earnings ratio than First Data, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
First Data has a beta of 1.93, meaning that its share price is 93% more volatile than the S&P 500. Comparatively, Fidelity National Information Servcs has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500.
Fidelity National Information Servcs beats First Data on 10 of the 17 factors compared between the two stocks.
About First Data
First Data Corporation provides commerce enabled technology and solutions for merchants, financial institutions, and card issuers in the United States, Canada, Europe, the Middle East, Africa, Latin America, and the Asia Pacific. The company operates through three segments: Global Business Solutions, Global Financial Solutions, and Network & Security Solutions. The Global Business Solutions segment provides solutions to merchants, such as retail point of sale merchant acquiring, e-commerce, and mobile payment services, as well as cloud based point of sale operating system that include a marketplace for proprietary and third party applications. The Global Finance Solutions segment provides technology solutions for bank and non-bank issuers, such as credit, retail private label, commercial card, and loan processing, as well as licensed financial software systems; suite of account services that include card personalization and embossing, customer communications, and professional services; and call center solutions and back office processing. The Network & Security Solutions segment offers EFT network, stored value network, and security and fraud solutions, as well as other value added solutions to its clients in GBS and GFS segments, smaller financial institutions, and other enterprise clients. First Data Corporation was founded in 1971 and is headquartered in Atlanta, Georgia.
About Fidelity National Information Servcs
Fidelity National Information Services, Inc. operates as a financial services technology company in the United States and internationally. It operates through Integrated Financial Solutions and Global Financial Solutions segments. The Integrated Financial Solutions segment offers core processing and ancillary applications; digital solutions, including Internet, mobile, and e-banking; fraud, risk management, and compliance solutions; electronic funds transfer and network services; card and retail solutions; corporate liquidity and wealth management services; item processing and output services; government payments solutions; and e-payment solutions. The Global Financial Solutions segment securities processing and finance, global trading, asset management and insurance, and retail banking and payment services. The company was founded in 1968 and is headquartered in Jacksonville, Florida.
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