NEWTEK Business Services Corp (NASDAQ: NEWT) and Moneygram International (NASDAQ:MGI) are both small-cap industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, institutional ownership, profitability and risk.

Dividends

NEWTEK Business Services Corp pays an annual dividend of $1.76 per share and has a dividend yield of 10.0%. Moneygram International does not pay a dividend. NEWTEK Business Services Corp pays out 93.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional & Insider Ownership

22.8% of NEWTEK Business Services Corp shares are owned by institutional investors. Comparatively, 93.9% of Moneygram International shares are owned by institutional investors. 6.7% of NEWTEK Business Services Corp shares are owned by company insiders. Comparatively, 49.5% of Moneygram International shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

NEWTEK Business Services Corp has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500. Comparatively, Moneygram International has a beta of 1.92, suggesting that its stock price is 92% more volatile than the S&P 500.

Profitability

This table compares NEWTEK Business Services Corp and Moneygram International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NEWTEK Business Services Corp N/A N/A N/A
Moneygram International 2.03% -14.11% 1.22%

Valuation & Earnings

This table compares NEWTEK Business Services Corp and Moneygram International’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NEWTEK Business Services Corp $35.85 million 8.56 $2.91 million $1.88 9.36
Moneygram International $1.63 billion 0.53 $226.70 million $0.48 33.13

Moneygram International has higher revenue and earnings than NEWTEK Business Services Corp. NEWTEK Business Services Corp is trading at a lower price-to-earnings ratio than Moneygram International, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings for NEWTEK Business Services Corp and Moneygram International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NEWTEK Business Services Corp 0 2 1 0 2.33
Moneygram International 1 5 0 0 1.83

NEWTEK Business Services Corp currently has a consensus price target of $17.00, indicating a potential downside of 3.41%. Moneygram International has a consensus price target of $14.16, indicating a potential downside of 10.94%. Given NEWTEK Business Services Corp’s stronger consensus rating and higher probable upside, equities research analysts plainly believe NEWTEK Business Services Corp is more favorable than Moneygram International.

Summary

Moneygram International beats NEWTEK Business Services Corp on 9 of the 16 factors compared between the two stocks.

NEWTEK Business Services Corp Company Profile

Newtek Business Services Corp. is an internally managed non-diversified closed-end management investment company. The Company’s investment objective is to generate both current income and capital appreciation primarily through loans originated by its small business finance platform and its equity investments in certain portfolio companies that it controls. The Company is a national non-bank lender that provides, together with its controlled portfolio companies, a range of business services and financial products under the Newtek brand to the small and medium-sized business (SMB) market. The Company issues debt and makes equity investments in portfolio companies in various industries. Its products and services include Business Lending including the United States Small Business Administration (SBA) 7(a) and 504 lending, Electronic Payment Processing, Managed Technology Solutions (Cloud Computing), Data Backup, and Payroll and Benefits Solutions to SMB accounts across all industries.

Moneygram International Company Profile

MoneyGram International, Inc. (MoneyGram) is a global provider of money transfer services. The Company operates through two segments: Global Funds Transfer and Financial Paper Products. The Company offers its services under the MoneyGram brand. The Company’s Global Funds Transfer Segment provides money transfer services and bill payment services primarily to unbanked and underbanked consumers. The Financial Paper Products Segment provides money orders to consumers through its agents and financial institutions located across the United States and Puerto Rico. The Company’s offerings include money transfers, bill payment services, money order services and official check processing. The Company’s money transfer services enable its consumers to send and receive funds across the world through its global network of locations. The Company also offers Digital/Self-Service solutions, such as moneygram.com, mobile solutions, account deposit and kiosk-based services.

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