Head-To-Head Review: Mastercard (NYSE:MA) & Jack Henry & Associates (NASDAQ:JKHY)

Jack Henry & Associates (NASDAQ:JKHY) and Mastercard (NYSE:MA) are both large-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, earnings, profitability, institutional ownership and analyst recommendations.

Valuation & Earnings

This table compares Jack Henry & Associates and Mastercard”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Jack Henry & Associates	$2.54 billion	4.86	$502.78 million	$7.28	24.41
Mastercard	$32.79 billion	17.56	$14.97 billion	$19.12	34.58

Mastercard has higher revenue and earnings than Jack Henry & Associates. Jack Henry & Associates is trading at a lower price-to-earnings ratio than Mastercard, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Jack Henry & Associates and Mastercard’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Jack Henry & Associates	19.96%	24.46%	16.68%
Mastercard	46.73%	260.86%	31.44%

Dividends

Jack Henry & Associates pays an annual dividend of $2.44 per share and has a dividend yield of 1.4%. Mastercard pays an annual dividend of $3.48 per share and has a dividend yield of 0.5%. Jack Henry & Associates pays out 33.5% of its earnings in the form of a dividend. Mastercard pays out 18.2% 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. Jack Henry & Associates has increased its dividend for 35 consecutive years and Mastercard has increased its dividend for 13 consecutive years. Jack Henry & Associates is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings for Jack Henry & Associates and Mastercard, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Jack Henry & Associates	0	5	13	1	2.79
Mastercard	1	1	31	2	2.97

Jack Henry & Associates presently has a consensus target price of $195.24, suggesting a potential upside of 9.89%. Mastercard has a consensus target price of $713.21, suggesting a potential upside of 7.88%. Given Jack Henry & Associates’ higher possible upside, equities research analysts plainly believe Jack Henry & Associates is more favorable than Mastercard.

Risk and Volatility

Jack Henry & Associates has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500. Comparatively, Mastercard has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500.

Institutional and Insider Ownership

98.8% of Jack Henry & Associates shares are owned by institutional investors. Comparatively, 97.3% of Mastercard shares are owned by institutional investors. 0.4% of Jack Henry & Associates shares are owned by company insiders. Comparatively, 0.1% of Mastercard shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Mastercard beats Jack Henry & Associates on 13 of the 18 factors compared between the two stocks.

About Jack Henry & Associates

Jack Henry & Associates, Inc. is a financial technology company that provides software and services to banks and credit unions. Founded in 1976 and headquartered in Monett, Missouri, the company focuses on helping financial institutions manage operations and serve customers. Its offerings include core banking systems, digital banking platforms, payment processing, lending solutions, and tools for managing fraud, risk, and information security. Jack Henry also provides data, hosting, and related technology services.

About Mastercard

Mastercard Incorporated is a global payments technology company that operates a network connecting consumers, merchants, financial institutions, businesses and governments. Its network supports electronic payments, including transactions made with Mastercard-branded credit, debit and prepaid cards, as well as digital payment methods. The company provides technology for authorizing, clearing and settling transactions. It also offers services related to cybersecurity, identity verification, data analytics, fraud prevention and payment consulting.