Head to Head Analysis: FirstCash (NASDAQ:FCFS) vs. Evertec (NYSE:EVTC)

Evertec (NYSE:EVTC) and FirstCash (NASDAQ:FCFS) are both business services companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, risk and valuation.

Insider & Institutional Ownership

96.8% of Evertec shares are owned by institutional investors. Comparatively, 80.3% of FirstCash shares are owned by institutional investors. 0.6% of Evertec shares are owned by company insiders. Comparatively, 2.9% of FirstCash shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Evertec has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500. Comparatively, FirstCash has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500.

Dividends

Evertec pays an annual dividend of $0.20 per share and has a dividend yield of 0.7%. FirstCash pays an annual dividend of $1.68 per share and has a dividend yield of 1.0%. Evertec pays out 8.9% of its earnings in the form of a dividend. FirstCash pays out 24.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. FirstCash has increased its dividend for 8 consecutive years. FirstCash is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Evertec and FirstCash, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Evertec	0	4	3	1	2.63
FirstCash	0	2	5	1	2.88

Evertec currently has a consensus target price of $35.80, suggesting a potential upside of 21.07%. FirstCash has a consensus target price of $167.00, suggesting a potential downside of 2.40%. Given Evertec’s higher possible upside, analysts clearly believe Evertec is more favorable than FirstCash.

Earnings and Valuation

This table compares Evertec and FirstCash”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Evertec	$845.49 million	2.24	$112.62 million	$2.25	13.14
FirstCash	$3.39 billion	2.23	$258.82 million	$6.93	24.69

FirstCash has higher revenue and earnings than Evertec. Evertec is trading at a lower price-to-earnings ratio than FirstCash, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Evertec and FirstCash’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Evertec	16.17%	34.79%	10.16%
FirstCash	8.88%	17.44%	7.92%

Summary

FirstCash beats Evertec on 9 of the 17 factors compared between the two stocks.

About Evertec

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.

About FirstCash

FirstCash Holdings, Inc, together with its subsidiaries, operates retail pawn stores in the United States, Mexico, and rest of Latin America. The company operates in three segments: U.S. Pawn, Latin America Pawn, and Retail POS Payment Solutions segments. Its pawn stores lend money on the collateral of pledged personal property, including jewelry, electronics, tools, appliances, sporting goods, and musical instruments; and retails merchandise acquired through collateral forfeitures on forfeited pawn loans and over-the-counter purchases of merchandise directly from customers. The company also provides retail POS payment solutions, which focuses on LTO products and facilitating other retail financing payment options across the network of traditional and e-commerce merchant partners. It serves cash and credit-constrained consumers. The company was formerly known as FirstCash, Inc and changed its name to FirstCash Holdings, Inc. in December 2021. FirstCash Holdings, Inc was incorporated in 1988 and is headquartered in Fort Worth, Texas.