Critical Review: Atento (ATTO) & Alliance Data Systems Corporation (ADS)
Atento (NYSE: ATTO) and Alliance Data Systems Corporation (NYSE:ADS) are both business services companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, risk, earnings, profitability, valuation, dividends and institutional ownership.
Alliance Data Systems Corporation pays an annual dividend of $2.08 per share and has a dividend yield of 0.9%. Atento does not pay a dividend. Alliance Data Systems Corporation pays out 23.7% of its earnings in the form of a dividend.
Risk and Volatility
Atento has a beta of 0.04, suggesting that its stock price is 96% less volatile than the S&P 500. Comparatively, Alliance Data Systems Corporation has a beta of 1.76, suggesting that its stock price is 76% more volatile than the S&P 500.
This is a summary of current ratings and target prices for Atento and Alliance Data Systems Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Alliance Data Systems Corporation||3||7||10||0||2.35|
Atento presently has a consensus price target of $14.50, indicating a potential upside of 22.88%. Alliance Data Systems Corporation has a consensus price target of $253.44, indicating a potential upside of 14.36%. Given Atento’s stronger consensus rating and higher probable upside, equities analysts plainly believe Atento is more favorable than Alliance Data Systems Corporation.
This table compares Atento and Alliance Data Systems Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Alliance Data Systems Corporation||6.77%||59.67%||3.74%|
Insider & Institutional Ownership
95.7% of Atento shares are owned by institutional investors. Comparatively, 96.1% of Alliance Data Systems Corporation shares are owned by institutional investors. 2.6% of Alliance Data Systems Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Earnings & Valuation
This table compares Atento and Alliance Data Systems Corporation’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Atento||$1.83 billion||0.48||$196.76 million||$0.25||47.20|
|Alliance Data Systems Corporation||$7.41 billion||1.66||$1.47 billion||$8.78||25.24|
Alliance Data Systems Corporation has higher revenue and earnings than Atento. Alliance Data Systems Corporation is trading at a lower price-to-earnings ratio than Atento, indicating that it is currently the more affordable of the two stocks.
Alliance Data Systems Corporation beats Atento on 12 of the 16 factors compared between the two stocks.
Atento S.A. is a provider of customer-relationship management and business-process outsourcing (CRM BPO) services and solutions in Latin America. The Company offers a portfolio of CRM BPO services, including customer care, sales, collections, back office and technical support. The Company operates through three segments: EMEA, Americas and Brazil. Its services and solutions are delivered across multiple channels including digital (short message service (SMS), e-mail, chats, social media and applications, among others) and voice, and are enabled by process design, technology and intelligence functions. The Company also has client relationships across a range of industries working in sectors, such as telecommunications, banking and financial services and multi-sector, which comprise the consumer goods, services, public administration, pay television, healthcare, transportation, technology and media industries.
About Alliance Data Systems Corporation
Alliance Data Systems Corporation is a provider of data-driven marketing and loyalty solutions serving consumer-based businesses in a range of industries. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. The Company operates through three segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company’s Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty); Epsilon, which provides end-to-end, integrated direct marketing solutions, and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company’s private label and co-brand retail credit card programs.
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