Financial Review: Evertec (EVTC) vs. Its Peers

Evertec (NYSE:EVTC) is one of 341 publicly-traded companies in the “Financial Services” industry, but how does it weigh in compared to its rivals? We will compare Evertec to related businesses based on the strength of its earnings, institutional ownership, dividends, profitability, risk, valuation and analyst recommendations.

Institutional & Insider Ownership

96.8% of Evertec shares are held by institutional investors. Comparatively, 43.0% of shares of all “Financial Services” companies are held by institutional investors. 1.1% of Evertec shares are held by insiders. Comparatively, 21.8% of shares of all “Financial Services” companies are held 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.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Evertec and its rivals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Evertec	0	3	2	0	2.40
Evertec Competitors	1988	6946	11713	446	2.50

Evertec currently has a consensus target price of $36.67, suggesting a potential upside of 8.84%. As a group, “Financial Services” companies have a potential downside of 6.28%. Given Evertec’s higher probable upside, research analysts plainly believe Evertec is more favorable than its rivals.

Profitability

This table compares Evertec and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Evertec	9.00%	32.81%	8.93%
Evertec Competitors	-338.89%	-39.94%	-5.83%

Volatility and Risk

Evertec has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500. Comparatively, Evertec’s rivals have a beta of 2.50, meaning that their average share price is 150% more volatile than the S&P 500.

Dividends

Evertec pays an annual dividend of $0.20 per share and has a dividend yield of 0.6%. Evertec pays out 13.2% of its earnings in the form of a dividend. As a group, “Financial Services” companies pay a dividend yield of 4.3% and pay out -72.2% of their earnings in the form of a dividend. Evertec lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Earnings and Valuation

This table compares Evertec and its rivals top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Evertec	$931.82 million	$141.59 million	22.16
Evertec Competitors	$9.22 billion	$1.09 billion	10.06

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

Summary

Evertec rivals beat Evertec on 9 of the 15 factors compared.

Evertec Company Profile

EVERTEC, Inc. engages in transaction processing business and financial technology in Latin America and the Caribbean. The company operates through four segments: Payment Services – Puerto Rico & Caribbean; Latin America Payments and Solutions; Merchant Acquiring; and Business Solutions. It provides merchant acquiring services, which enable point of sales and e-commerce merchants to accept and process electronic methods of payment, such as debit, credit, prepaid, and electronic benefit transfer (EBT) cards. In addition, the company offers payment processing services that enable financial institutions and other issuers to manage, support, and facilitate the processing for credit, debit, prepaid, automated teller machines, and EBT card programs; credit and debit card processing, authorization and settlement, and fraud monitoring and control services to debit or credit issuers services. Further, it provides business process management solutions comprising core bank processing, network hosting and management, IT professional, business process outsourcing, item and cash processing, and fulfillment solutions to merchant, fintech, financial institutions, and corporate and government customers. Additionally, the company owns and operates the ATH network, a personal identification number debit networks. It manages a system of electronic payment networks that process approximately six billion transactions. The company sells and distributes its services primarily through direct sales force. It serves financial institutions, merchants, corporations, and government agencies. EVERTEC, Inc. was founded in 1988 and is headquartered in San Juan, Puerto Rico.