Global Payments (GPN) and Newtek Business Services Corp. (NEWT) Financial Review
Global Payments (NYSE: GPN) and Newtek Business Services Corp. (NASDAQ:NEWT) are both business services companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, risk, earnings, dividends, analyst recommendations, institutional ownership and valuation.
This table compares Global Payments and Newtek Business Services Corp.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Newtek Business Services Corp.||78.03%||8.14%||4.35%|
Earnings and Valuation
This table compares Global Payments and Newtek Business Services Corp.’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Global Payments||$2.90 billion||5.41||$271.66 million||$1.63||63.07|
|Newtek Business Services Corp.||$30.97 million||9.26||$27.30 million||$1.65||9.99|
Global Payments has higher revenue and earnings than Newtek Business Services Corp.. Newtek Business Services Corp. is trading at a lower price-to-earnings ratio than Global Payments, indicating that it is currently the more affordable of the two stocks.
Global Payments pays an annual dividend of $0.04 per share and has a dividend yield of 0.0%. Newtek Business Services Corp. pays an annual dividend of $1.76 per share and has a dividend yield of 10.7%. Global Payments pays out 2.5% of its earnings in the form of a dividend. Newtek Business Services Corp. pays out 106.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Risk & Volatility
Global Payments has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500. Comparatively, Newtek Business Services Corp. has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500.
Insider and Institutional Ownership
98.0% of Global Payments shares are owned by institutional investors. Comparatively, 22.5% of Newtek Business Services Corp. shares are owned by institutional investors. 0.9% of Global Payments shares are owned by insiders. Comparatively, 6.7% of Newtek Business Services Corp. shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This is a breakdown of recent ratings and target prices for Global Payments and Newtek Business Services Corp., as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Newtek Business Services Corp.||0||3||0||0||2.00|
Given Newtek Business Services Corp.’s higher possible upside, analysts plainly believe Newtek Business Services Corp. is more favorable than Global Payments.
Global Payments beats Newtek Business Services Corp. on 9 of the 16 factors compared between the two stocks.
About Global Payments
Global Payments Inc. is a provider of payment technology services. The Company provides payment and digital commerce solutions. The Company operates through three segments: North America, Europe and Asia-Pacific. The Company’s segments primarily provide payment solutions for credit cards, debit cards, electronic payments and check-related services. The Company’s segments target customers in various industries, including financial services, gaming, government, healthcare, professional services, restaurants, retail, universities, not-for-profit organizations and utilities. It provides services across a range of channels to merchants and partners in over 30 countries throughout North America, Europe, the Asia-Pacific region and Brazil. The Company performs a series of services, including authorization, electronic draft capture, file transfers to facilitate funds settlement and certain exception-based, back office support services, such as chargeback and retrieval resolution.
About Newtek Business Services Corp.
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.
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