Reviewing General Finance (GFN) & Worldpay (WP)

Worldpay (NYSE: WP) and General Finance (NASDAQ:GFN) are both industrials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, earnings, dividends, profitability, analyst recommendations, valuation and risk.

Analyst Ratings

This is a summary of current recommendations for Worldpay and General Finance, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Worldpay 0 4 27 1 2.91
General Finance 0 1 2 0 2.67

Worldpay presently has a consensus target price of $82.93, suggesting a potential upside of 12.80%. General Finance has a consensus target price of $9.20, suggesting a potential upside of 23.49%. Given General Finance’s higher possible upside, analysts plainly believe General Finance is more favorable than Worldpay.

Profitability

This table compares Worldpay and General Finance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Worldpay 6.07% 41.19% 7.92%
General Finance 0.18% 0.39% 0.08%

Institutional & Insider Ownership

27.2% of General Finance shares are owned by institutional investors. 1.3% of Worldpay shares are owned by company insiders. Comparatively, 25.9% of General Finance 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.

Valuation & Earnings

This table compares Worldpay and General Finance’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Worldpay $3.58 billion 3.65 $213.20 million $1.44 51.06
General Finance $276.93 million 0.72 -$2.96 million ($0.11) -67.73

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

Volatility & Risk

Worldpay has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500. Comparatively, General Finance has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500.

Summary

Worldpay beats General Finance on 10 of the 14 factors compared between the two stocks.

Worldpay Company Profile

Worldpay, Inc., formerly Vantiv, Inc., is a holding company. The Company conducts its operations through its subsidiary, Vantiv Holding, LLC. The Company is a payment processor. The Company’s segments include Merchant Services and Financial Institution Services. The Company offers a range of payment processing services that enable its clients to meet their payment processing needs through a single provider. The Company enables merchants to accept and process credit, debit and prepaid payments, and provide them supporting value-added services, such as security solutions and fraud management, information solutions and interchange management. It also provides payment services to financial institutions, such as card issuer processing, payment network processing, fraud protection, card production, prepaid program management, automated teller machine (ATM) driving and network gateway and switching services.

General Finance Company Profile

General Finance Corporation is a specialty rental services company. The Company offers a range of portable storage units, including its core 20-feet and 40-feet steel containers, office container, mobile office and modular space products and steel tanks. It has two geographic areas that include its four operating segments: the Asia-Pacific area, consisting of the leasing operations of Royal Wolf Holdings Limited and its Australian and New Zealand subsidiaries (Royal Wolf), and North America, consisting of the combined leasing operations of Pac-Van, Inc. and its Canadian subsidiary, PV Acquisition Corp. (Pac-Van) and Lone Star Tank Rental Inc. (Lone Star), and the manufacturing operations of GFN Manufacturing Corporation and its subsidiary, Southern Frac, LLC (Southern Frac). As of June 30, 2016, the Company provided its storage solutions to over 41,000 customers across a range of industries, including commercial, construction, retail, transportation, education and others.

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