Lifelock (NYSE: LOCK) and Alliance Data Systems Corporation (NYSE:ADS) are both industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, earnings, analyst recommendations, dividends and profitability.

Insider and Institutional Ownership

88.8% of Lifelock shares are held by institutional investors. Comparatively, 96.1% of Alliance Data Systems Corporation shares are held by institutional investors. 13.9% of Lifelock shares are held by insiders. Comparatively, 2.6% of Alliance Data Systems Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Lifelock and Alliance Data Systems Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lifelock 8.46% 24.53% 10.96%
Alliance Data Systems Corporation 7.09% 62.95% 3.66%

Dividends

Alliance Data Systems Corporation pays an annual dividend of $2.08 per share and has a dividend yield of 0.9%. Lifelock does not pay a dividend. Alliance Data Systems Corporation pays out 22.1% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Lifelock and Alliance Data Systems Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lifelock 1 3 0 0 1.75
Alliance Data Systems Corporation 3 7 9 0 2.32

Lifelock presently has a consensus target price of $24.00, suggesting a potential upside of 0.00%. Alliance Data Systems Corporation has a consensus target price of $257.00, suggesting a potential upside of 14.49%. Given Alliance Data Systems Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Alliance Data Systems Corporation is more favorable than Lifelock.

Volatility & Risk

Lifelock has a beta of 1.34, suggesting that its stock price is 34% more 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.

Valuation and Earnings

This table compares Lifelock and Alliance Data Systems Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Lifelock N/A N/A N/A $0.17 141.18
Alliance Data Systems Corporation $7.41 billion 1.68 $1.47 billion $9.43 23.80

Alliance Data Systems Corporation has higher revenue and earnings than Lifelock. Alliance Data Systems Corporation is trading at a lower price-to-earnings ratio than Lifelock, indicating that it is currently the more affordable of the two stocks.

Summary

Alliance Data Systems Corporation beats Lifelock on 9 of the 13 factors compared between the two stocks.

Lifelock Company Profile

LifeLock, Inc. provides proactive identity theft protection services for consumers and consumer risk management services for enterprises. The Company monitors certain identity-related events, such as new account openings and credit-related applications. It operates in two segments: consumer segment and an enterprise segment. The Company’s LifeLock ecosystem combines data repositories of personally identifiable information and consumer transactions, predictive analytics and a technology platform. It applies predictive analytics to the data in its repositories to provide its members and enterprise customers’ actionable intelligence that helps protect against identity theft and identity fraud. It offers its consumer services on a monthly or annual subscription basis. It provides consumer risk management services, including delivering its on-demand identity risk, identity-authentication and credit information about consumers to its enterprise customers in the daily transaction flows.

Alliance Data Systems Corporation Company Profile

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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