Financial Analysis: Evertec (EVTC) and F5 Networks (FFIV)

Evertec (NYSE: EVTC) and F5 Networks (NASDAQ:FFIV) are both business services companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, valuation, dividends and profitability.

Insider and Institutional Ownership

81.9% of Evertec shares are owned by institutional investors. Comparatively, 94.7% of F5 Networks shares are owned by institutional investors. 1.4% of Evertec shares are owned by company insiders. Comparatively, 0.3% of F5 Networks shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Evertec and F5 Networks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Evertec 15.92% 95.54% 13.45%
F5 Networks 20.13% 34.70% 17.25%

Analyst Ratings

This is a summary of current ratings and price targets for Evertec and F5 Networks, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Evertec 2 3 1 0 1.83
F5 Networks 1 15 6 0 2.23

Evertec presently has a consensus target price of $16.40, suggesting a potential upside of 13.10%. F5 Networks has a consensus target price of $130.67, suggesting a potential downside of 7.37%. Given Evertec’s higher possible upside, equities research analysts clearly believe Evertec is more favorable than F5 Networks.

Valuation and Earnings

This table compares Evertec and F5 Networks’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Evertec $389.51 million 2.69 $75.03 million $0.88 16.48
F5 Networks $2.09 billion 4.22 $420.76 million $6.51 21.67

F5 Networks has higher revenue and earnings than Evertec. Evertec is trading at a lower price-to-earnings ratio than F5 Networks, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Evertec has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500. Comparatively, F5 Networks has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500.

Dividends

Evertec pays an annual dividend of $0.30 per share and has a dividend yield of 2.1%. F5 Networks does not pay a dividend. Evertec pays out 34.1% of its earnings in the form of a dividend.

Summary

F5 Networks beats Evertec on 11 of the 16 factors compared between the two stocks.

Evertec Company Profile

EVERTEC, Inc. is a transaction processing company. The Company provides a range of merchant acquiring, payment processing and business process management services. The Company operates through three segments: Merchant Acquiring, Payment Processing and Business Solutions. As of December 31, 2016, it managed a system of electronic payment networks that processed over two billion transactions annually. It offers a range of services for core bank processing, cash processing and technology outsourcing. It owns and operates the ATH network, which is a personal identification number (PIN) debit network in Latin America. It serves a range of financial institutions, merchants, corporations and government agencies with solutions that enable them to issue, process and accept transactions securely. The Company’s range of services spans the entire transaction processing value chain and includes a range of front-end customer-facing solutions.

F5 Networks Company Profile

F5 Networks, Inc. is a developer and provider of software defined application services. The Company is engaged in the development, marketing and sale of application delivery networking products that optimize the security, performance and availability of network applications, servers and storage systems. The Company’s geographical segments include the Americas (primarily the United States); Europe, the Middle East, and Africa (EMEA); Japan, and the Asia Pacific region (APAC). The Company’s Traffic Management Operating System (TMOS) based offerings include software products for local and global traffic management, network and application security, access management, Web acceleration and various network and application services. These products are available as modules that can run individually or as part of an integrated solution on the Company’s purpose-built BIG-IP appliances and VIPRION chassis-based hardware, or as software-only Virtual Editions.

Receive News & Ratings for Evertec Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Evertec and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply