Analyzing CompoSecure (NASDAQ:CMPO) and Evertec (NYSE:EVTC)

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

Risk and Volatility

CompoSecure has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500. Comparatively, Evertec has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for CompoSecure and Evertec, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CompoSecure	0	1	6	0	2.86
Evertec	0	5	3	0	2.38

CompoSecure presently has a consensus price target of $25.50, suggesting a potential upside of 25.52%. Evertec has a consensus price target of $35.80, suggesting a potential upside of 22.75%. Given CompoSecure’s stronger consensus rating and higher possible upside, analysts plainly believe CompoSecure is more favorable than Evertec.

Earnings & Valuation

This table compares CompoSecure and Evertec”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CompoSecure	$160.68 million	15.98	-$53.72 million	($2.16)	-9.41
Evertec	$845.49 million	2.21	$112.62 million	$2.25	12.96

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

Insider and Institutional Ownership

37.6% of CompoSecure shares are owned by institutional investors. Comparatively, 96.8% of Evertec shares are owned by institutional investors. 52.1% of CompoSecure shares are owned by insiders. Comparatively, 0.6% of Evertec shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares CompoSecure and Evertec’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CompoSecure	-24.53%	-65.50%	26.83%
Evertec	16.17%	34.79%	10.16%

About CompoSecure

CompoSecure, Inc. manufactures and designs metal, composite, and proprietary financial transaction cards in the United States and internationally. Its primary metal form factors include embedded, metal veneer lite, metal veneer, and full metal products. The company also offers Arculus Cold Storage Wallet, a three-factor authentication solution, which supports specific digital assets, including Bitcoin, Ethereum, non-fungible tokens and others. In addition, it offers Payments + Arculus Secure Authenticate, white-labeled cold storage wallet, Payments + Arculus Cold Storage, and Payments + Arculus Authentication + Arculus Cold Storage. The company serves financial institutions, plastic card manufacturers, system integrators, and security specialists. CompoSecure, Inc. was founded in 1910 and is based in Somerset, New Jersey.

About Evertec

EVERTEC, Inc. engages in transaction processing business and financial technology in Latin America and the Caribbean. The company operates through four segments: Payment Services – Puerto Rico & Caribbean; Latin America Payments and Solutions; Merchant Acquiring; and Business Solutions. It provides merchant acquiring services, which enable point of sales and e-commerce merchants to accept and process electronic methods of payment, such as debit, credit, prepaid, and electronic benefit transfer (EBT) cards. In addition, the company offers payment processing services that enable financial institutions and other issuers to manage, support, and facilitate the processing for credit, debit, prepaid, automated teller machines, and EBT card programs; credit and debit card processing, authorization and settlement, and fraud monitoring and control services to debit or credit issuers services. Further, it provides business process management solutions comprising core bank processing, network hosting and management, IT professional, business process outsourcing, item and cash processing, and fulfillment solutions to merchant, fintech, financial institutions, and corporate and government customers. Additionally, the company owns and operates the ATH network, a personal identification number debit networks. It manages a system of electronic payment networks that process approximately six billion transactions. The company sells and distributes its services primarily through direct sales force. It serves financial institutions, merchants, corporations, and government agencies. EVERTEC, Inc. was founded in 1988 and is headquartered in San Juan, Puerto Rico.