Atento (ATTO) & WageWorks (WAGE) Financial Contrast

Atento (NYSE: ATTO) and WageWorks (NYSE:WAGE) are both business services companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Profitability

This table compares Atento and WageWorks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atento 0.52% 12.63% 3.81%
WageWorks 9.87% 9.60% 3.37%

Dividends

Atento pays an annual dividend of $0.34 per share and has a dividend yield of 3.5%. WageWorks does not pay a dividend. Atento pays out 242.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Atento and WageWorks, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atento 0 1 2 0 2.67
WageWorks 0 1 4 0 2.80

Atento currently has a consensus price target of $14.67, indicating a potential upside of 51.20%. WageWorks has a consensus price target of $83.00, indicating a potential upside of 29.38%. Given Atento’s higher probable upside, equities research analysts clearly believe Atento is more favorable than WageWorks.

Earnings & Valuation

This table compares Atento and WageWorks’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Atento $1.76 billion 0.41 $60,000.00 $0.14 69.29
WageWorks $364.71 million 6.97 $20.20 million $1.17 54.83

WageWorks has lower revenue, but higher earnings than Atento. WageWorks is trading at a lower price-to-earnings ratio than Atento, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

94.7% of Atento shares are held by institutional investors. 3.5% of WageWorks shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

Atento has a beta of -0.06, indicating that its stock price is 106% less volatile than the S&P 500. Comparatively, WageWorks has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500.

Summary

WageWorks beats Atento on 10 of the 16 factors compared between the two stocks.

About Atento

Atento S.A. is a provider of customer-relationship management and business-process outsourcing (CRM BPO) services and solutions in Latin America. The Company offers a portfolio of CRM BPO services, including customer care, sales, collections, back office and technical support. The Company operates through three segments: EMEA, Americas and Brazil. Its services and solutions are delivered across multiple channels including digital (short message service (SMS), e-mail, chats, social media and applications, among others) and voice, and are enabled by process design, technology and intelligence functions. The Company also has client relationships across a range of industries working in sectors, such as telecommunications, banking and financial services and multi-sector, which comprise the consumer goods, services, public administration, pay television, healthcare, transportation, technology and media industries.

About WageWorks

WageWorks, Inc. is engaged in administering Consumer-Directed Benefits (CDBs). The Company administers CBDs, including pre-tax spending accounts, such as Health Savings Accounts (HSAs), health and dependent care Flexible Spending Accounts (FSAs), and Health Reimbursement Arrangements (HRAs), as well as Commuter Benefit Services, including transit and parking programs, wellness programs, Consolidated Omnibus Budget Reconciliation Act (COBRA) and other employee benefits. Its CDB programs assist employees and their families in saving money by using pre-tax dollars to pay for certain of their healthcare, dependent care and commuter expenses. Employers financially benefit from its programs through reduced payroll taxes. It provides operational support services to its clients and its cross-functional teams, including customer support and claims processing. It administers HSAs for employers that allow employee participants to invest funds to be used for qualified healthcare expenses.

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