Total System Services (NYSE: TSS) and Covisint (NASDAQ:COVS) are both business services companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, risk, analyst recommendations, valuation, institutional ownership and profitability.

Institutional & Insider Ownership

75.9% of Total System Services shares are owned by institutional investors. Comparatively, 65.5% of Covisint shares are owned by institutional investors. 2.6% of Total System Services shares are owned by insiders. Comparatively, 3.9% of Covisint shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Total System Services pays an annual dividend of $0.52 per share and has a dividend yield of 0.7%. Covisint does not pay a dividend. Total System Services pays out 23.1% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Total System Services and Covisint’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Total System Services $4.17 billion 3.49 $319.63 million $2.25 35.15
Covisint N/A N/A N/A ($0.31) -7.90

Total System Services has higher revenue and earnings than Covisint. Covisint is trading at a lower price-to-earnings ratio than Total System Services, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Total System Services has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500. Comparatively, Covisint has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Total System Services and Covisint, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Total System Services 1 11 15 0 2.52
Covisint 0 0 0 0 N/A

Total System Services currently has a consensus target price of $72.04, indicating a potential downside of 8.91%. Given Total System Services’ higher probable upside, equities analysts clearly believe Total System Services is more favorable than Covisint.

Profitability

This table compares Total System Services and Covisint’s 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%
Covisint 8.37% 10.72% 7.55%

Summary

Total System Services beats Covisint on 10 of the 13 factors compared between the two stocks.

Total System Services Company Profile

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.

Covisint Company Profile

Covisint Corporation provides an open, enterprise class cloud platform (Platform) enabling organizations to build solutions that identify, authenticate and connect users, devices, applications and information. The Company’s Auto Supply Portal is involved in the development and integration of three cloud-based technologies, such as identity management, data integration and exchange services, and portal services. The Company’s Platform is delivered through the cloud as a Platform as a Service (PaaS). The Company’s Platform supports production-critical applications, and offers security, scalability and reliability. The Platform’s various capabilities include Identity services, Messaging and orchestration services and Internet of Things (IoT) Services. Its customers include large, across the globe distributed organizations and mid-sized organizations with external business relationships, as well as the participants in their business relationships.

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