Financial Contrast: Alliance Data Systems Corporation (ADS) & Vantiv (VNTV)
Alliance Data Systems Corporation (NYSE: ADS) and Vantiv (NYSE:VNTV) are both large-cap business services companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, valuation, analyst recommendations, earnings, risk and institutional ownership.
Volatility and Risk
Alliance Data Systems Corporation has a beta of 1.78, meaning that its share price is 78% more volatile than the S&P 500. Comparatively, Vantiv has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500.
Alliance Data Systems Corporation pays an annual dividend of $2.08 per share and has a dividend yield of 0.9%. Vantiv does not pay a dividend. Alliance Data Systems Corporation pays out 22.1% of its earnings in the form of a dividend.
This table compares Alliance Data Systems Corporation and Vantiv’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Alliance Data Systems Corporation||7.09%||62.95%||3.66%|
Earnings and Valuation
This table compares Alliance Data Systems Corporation and Vantiv’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Alliance Data Systems Corporation||$7.14 billion||1.75||$432.30 million||$9.43||23.92|
|Vantiv||$3.58 billion||3.80||$213.20 million||$1.45||47.48|
Alliance Data Systems Corporation has higher revenue and earnings than Vantiv. Alliance Data Systems Corporation is trading at a lower price-to-earnings ratio than Vantiv, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
96.1% of Alliance Data Systems Corporation shares are owned by institutional investors. Comparatively, 80.4% of Vantiv shares are owned by institutional investors. 2.6% of Alliance Data Systems Corporation shares are owned by company insiders. Comparatively, 1.3% of Vantiv shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
This is a breakdown of current ratings and target prices for Alliance Data Systems Corporation and Vantiv, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Alliance Data Systems Corporation||3||7||9||0||2.32|
Alliance Data Systems Corporation presently has a consensus target price of $257.00, suggesting a potential upside of 13.92%. Vantiv has a consensus target price of $75.46, suggesting a potential upside of 9.61%. Given Alliance Data Systems Corporation’s higher probable upside, equities analysts plainly believe Alliance Data Systems Corporation is more favorable than Vantiv.
Alliance Data Systems Corporation beats Vantiv on 10 of the 16 factors compared between the two stocks.
About Alliance Data Systems Corporation
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.
Vantiv, Inc. is a holding company. The Company conducts its operations through its subsidiary, Vantiv Holding, LLC. The Company is a payment processor. The Company’s segments include Merchant Services and Financial Institution Services. The Company offers a range of payment processing services that enable its clients to meet their payment processing needs through a single provider. The Company enables merchants to accept and process credit, debit and prepaid payments, and provide them supporting value-added services, such as security solutions and fraud management, information solutions and interchange management. It also provides payment services to financial institutions, such as card issuer processing, payment network processing, fraud protection, card production, prepaid program management, automated teller machine (ATM) driving and network gateway and switching services that utilize the Company’s Jeanie personal identification number (PIN) debit payment network.
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