Cass Information Systems (CASS) and Its Competitors Critical Analysis

Cass Information Systems (NASDAQ:CASS) is one of 341 publicly-traded companies in the “Financial Services” industry, but how does it contrast to its peers? We will compare Cass Information Systems to related companies based on the strength of its profitability, earnings, dividends, institutional ownership, analyst recommendations, valuation and risk.

Dividends

Cass Information Systems pays an annual dividend of $1.36 per share and has a dividend yield of 2.5%. Cass Information Systems pays out 46.7% of its earnings in the form of a dividend. As a group, “Financial Services” companies pay a dividend yield of 4.0% and pay out -89.0% of their earnings in the form of a dividend. Cass Information Systems has raised its dividend for 23 consecutive years. Cass Information Systems lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Valuation and Earnings

This table compares Cass Information Systems and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Cass Information Systems	$192.09 million	$35.12 million	18.91
Cass Information Systems Competitors	$6.40 billion	$1.09 billion	9.16

Cass Information Systems’ peers have higher revenue and earnings than Cass Information Systems. Cass Information Systems is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Cass Information Systems and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cass Information Systems	18.94%	15.46%	1.47%
Cass Information Systems Competitors	-412.95%	-40.67%	-5.97%

Risk and Volatility

Cass Information Systems has a beta of 0.41, suggesting that its stock price is 59% less volatile than the S&P 500. Comparatively, Cass Information Systems’ peers have a beta of 2.51, suggesting that their average stock price is 151% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Cass Information Systems and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cass Information Systems	0	3	1	0	2.25
Cass Information Systems Competitors	1974	6900	11646	443	2.50

Cass Information Systems presently has a consensus target price of $58.50, indicating a potential upside of 6.31%. As a group, “Financial Services” companies have a potential downside of 7.83%. Given Cass Information Systems’ higher possible upside, equities research analysts clearly believe Cass Information Systems is more favorable than its peers.

Institutional and Insider Ownership

59.1% of Cass Information Systems shares are held by institutional investors. Comparatively, 43.0% of shares of all “Financial Services” companies are held by institutional investors. 3.4% of Cass Information Systems shares are held by company insiders. Comparatively, 21.9% of shares of all “Financial Services” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Cass Information Systems peers beat Cass Information Systems on 9 of the 15 factors compared.

Cass Information Systems Company Profile

Cass Information Systems, Inc. provides payment and information processing services to manufacturing, distribution, and retail enterprises in the United States. The company operates through two segments, Information Services and Banking Services. Its services include freight invoice rating, payment processing, auditing, and the generation of accounting and transportation information. The company also processes and pays facility-related invoices, such as electricity, gas, waste, and telecommunications expenses; and provides telecom expense management solutions, as well as church management software solution and on-line platform to provide generosity services for faith-based and non-profit organizations. In addition, the company, through its banking subsidiary, Cass Commercial Bank, provides a range of banking products and services, such as demand, savings, time, and money market deposits; commercial, industrial, commercial real estate, and construction and land development loans; and cash management services to privately held businesses, restaurant franchises, and faith-related ministries. Further, it provides B2B payment platform for clients that require an agile fintech partner. It operates through its banking facility near downtown St. Louis, Missouri; operating branch in the Bridgeton, Missouri; and leased facilities in Colorado Springs, Colorado. The company was formerly known as Cass Commercial Corporation and changed its name to Cass Information Systems, Inc. in January 2001. Cass Information Systems, Inc. was founded in 1906 and is headquartered in Saint Louis, Missouri.