Analyzing Total System Services (TSS) & Guidance Software (GUID)

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

Earnings & Valuation

This table compares Total System Services and Guidance Software’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Total System Services $4.93 billion 3.11 $586.18 million $3.16 26.38
Guidance Software N/A N/A N/A ($0.24) -29.46

Total System Services has higher revenue and earnings than Guidance Software. Guidance Software 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.

Profitability

This table compares Total System Services and Guidance Software’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Total System Services 11.90% 26.21% 9.50%
Guidance Software -4.73% -559.09% -6.73%

Analyst Recommendations

This is a breakdown of current recommendations for Total System Services and Guidance Software, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Total System Services 1 11 16 0 2.54
Guidance Software 0 3 3 0 2.50

Total System Services currently has a consensus target price of $81.64, indicating a potential downside of 2.05%. Guidance Software has a consensus target price of $8.02, indicating a potential upside of 13.44%. Given Guidance Software’s higher possible upside, analysts plainly believe Guidance Software is more favorable than Total System Services.

Insider & Institutional Ownership

76.3% of Total System Services shares are held by institutional investors. Comparatively, 51.8% of Guidance Software shares are held by institutional investors. 2.6% of Total System Services shares are held by company insiders. Comparatively, 38.1% of Guidance Software shares are held by company 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 0.6%. Guidance Software does not pay a dividend. Total System Services pays out 16.5% of its earnings in the form of a dividend.

Summary

Total System Services beats Guidance Software on 10 of the 13 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 Guidance Software

Guidance Software, Inc. is a technology company. The Company is a provider of endpoint investigation solutions for cybersecurity analytics, security incident response, e-discovery, data privacy and forensic analysis. The Company has five segments, which include Products, Subscription, Professional services, Training and Maintenance. The Company’s Products segment includes EnCase, EnCase Endpoint Security, EnCase eDiscovery, EnCase Forensic, EnCase Portable, Premium License Support Program and hardware sales. Its Subscription segment includes subscription services for cloud-based document review and production software. Its Professional services segment performs consulting services and implementations. Its Training segment provides training classes, by which the Company trains its customers to use its software products. Its maintenance segment provides software updates, telephone and e-mail support.

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