Critical Contrast: Total System Services (TSS) & Quality Systems (QSII)
Total System Services (NYSE: TSS) and Quality Systems (NASDAQ:QSII) are both technology companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, profitability, earnings, dividends and valuation.
Risk and Volatility
Total System Services has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500. Comparatively, Quality Systems has a beta of 0.82, suggesting that its stock price is 18% less volatile than the S&P 500.
Earnings and Valuation
This table compares Total System Services and Quality Systems’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Total System Services||$4.17 billion||3.26||$319.63 million||$2.25||32.90|
|Quality Systems||$509.62 million||1.79||$18.24 million||$0.43||33.30|
Total System Services has higher revenue and earnings than Quality Systems. Total System Services is trading at a lower price-to-earnings ratio than Quality Systems, indicating that it is currently the more affordable of the two stocks.
This table compares Total System Services and Quality Systems’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Total System Services||8.73%||26.25%||9.23%|
Total System Services pays an annual dividend of $0.52 per share and has a dividend yield of 0.7%. Quality Systems does not pay a dividend. Total System Services pays out 23.1% of its earnings in the form of a dividend.
This is a breakdown of recent ratings and target prices for Total System Services and Quality Systems, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Total System Services||1||9||16||0||2.58|
Total System Services presently has a consensus price target of $69.17, indicating a potential downside of 6.56%. Quality Systems has a consensus price target of $15.07, indicating a potential upside of 5.25%. Given Quality Systems’ higher possible upside, analysts plainly believe Quality Systems is more favorable than Total System Services.
Insider & Institutional Ownership
75.2% of Total System Services shares are owned by institutional investors. Comparatively, 70.4% of Quality Systems shares are owned by institutional investors. 2.6% of Total System Services shares are owned by company insiders. Comparatively, 17.9% of Quality Systems shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Total System Services beats Quality Systems on 12 of the 16 factors compared between the two stocks.
About Total System Services
Total System Services, Inc. (TSYS) is a payment solutions provider that provides payment processing services, merchant services and related payment services to financial and non-financial institutions. The Company’s segments include North America Services, Merchant Services, NetSpend and International Services. In addition, it provides general purpose reloadable (GPR) prepaid and payroll cards, and alternative financial service solutions to the underbanked and other consumers. The Company’s Merchant Services segment provides third party processing services to merchant acquirers and Independent Sales Organizations (ISOs) and financial institutions. The Company’s NetSpend segment is engaged in the provision and sale of prepaid access devices, such as its GPR prepaid debit cards. The Company’s services and solutions include Issuing Services, Acquiring Services, Prepaid Solutions and Merchant Solutions.
About Quality Systems
Quality Systems, Inc. (QSI) primarily, through its NextGen Healthcare subsidiary, provides technology-based solutions and services to the ambulatory care market in the United States. The Company is engaged in developing and marketing software and services that automate certain aspects of practice management (PM) and electronic health records (EHR) for medical and dental practices. The Company operates through three segments: the NextGen Division, the RCM Services Division and the QSI Dental Division. It also provides implementation, training, support and maintenance for software and complementary services, such as revenue cycle management (RCM) and electronic data interchange (EDI). The Company’s clients include single and small practice physicians, networks of practices, such as physician hospital organizations (PHOs), management service organizations (MSOs), accountable care organizations (ACOs), ambulatory care centers, community health centers, and medical and dental schools.
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