Head to Head Analysis: Global Payments (GPN) versus First Data Corporation (FDC)
Global Payments (NYSE: GPN) and First Data Corporation (NYSE:FDC) are both large-cap business services companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.
Earnings and Valuation
This table compares Global Payments and First Data Corporation’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Global Payments||$4.19 billion||3.42||$1.15 billion||$1.63||57.59|
|First Data Corporation||$7.91 billion||2.14||$2.79 billion||$0.59||31.03|
First Data Corporation has higher revenue and earnings than Global Payments. First Data Corporation is trading at a lower price-to-earnings ratio than Global Payments, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
97.9% of Global Payments shares are held by institutional investors. Comparatively, 39.1% of First Data Corporation shares are held by institutional investors. 0.9% of Global Payments shares are held by company insiders. Comparatively, 6.3% of First Data Corporation shares 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.
This is a summary of current ratings and price targets for Global Payments and First Data Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|First Data Corporation||0||9||19||0||2.68|
Global Payments currently has a consensus price target of $94.26, indicating a potential upside of 0.42%. First Data Corporation has a consensus price target of $18.79, indicating a potential upside of 2.61%. Given First Data Corporation’s higher possible upside, analysts clearly believe First Data Corporation is more favorable than Global Payments.
This table compares Global Payments and First Data Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|First Data Corporation||4.66%||26.25%||3.05%|
Global Payments pays an annual dividend of $0.05 per share and has a dividend yield of 0.1%. First Data Corporation does not pay a dividend. Global Payments pays out 3.1% of its earnings in the form of a dividend.
Volatility & Risk
Global Payments has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, First Data Corporation has a beta of 1.77, suggesting that its stock price is 77% more volatile than the S&P 500.
About Global Payments
Global Payments Inc. is a provider of payment technology services. The Company provides payment and digital commerce solutions. The Company operates through three segments: North America, Europe and Asia-Pacific. The Company’s segments primarily provide payment solutions for credit cards, debit cards, electronic payments and check-related services. The Company’s segments target customers in various industries, including financial services, gaming, government, healthcare, professional services, restaurants, retail, universities, not-for-profit organizations and utilities. It provides services across a range of channels to merchants and partners in over 30 countries throughout North America, Europe, the Asia-Pacific region and Brazil. The Company performs a series of services, including authorization, electronic draft capture, file transfers to facilitate funds settlement and certain exception-based, back office support services, such as chargeback and retrieval resolution.
About First Data Corporation
First Data Corporation is a provider of commerce-enabling technology and solutions for merchants, financial institutions and card issuers. The Company’s segments are Global Business Solutions (GBS), Global Financial Solutions (GFS), Network & Security Solutions (NSS), and Corporate. The GBS segment provides businesses of all sizes and types with a range of solutions at the point of sale, including merchant acquiring, e-commerce, mobile commerce, point-of-sale, and other business solutions. The GFS segment provides financial institutions, which include bank and non-bank issuers, such as retailers with card portfolios, with a range of solutions that enable them to offer financial products and solutions to their customers. The NSS segment provides a range of network solutions and security, risk and fraud management solutions to business and financial institution clients in its GBS and GFS segments, and to financial institutions, businesses, governments, processors and other clients.
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