Contrasting Usio (NASDAQ:USIO) and Western Union (NYSE:WU)

Usio (NASDAQ:USIO) and Western Union (NYSE:WU) are both business services companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Profitability

This table compares Usio and Western Union’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Usio	-0.46%	-2.05%	-0.37%
Western Union	18.80%	60.85%	6.97%

Insider & Institutional Ownership

20.2% of Usio shares are owned by institutional investors. Comparatively, 91.8% of Western Union shares are owned by institutional investors. 17.8% of Usio shares are owned by insiders. Comparatively, 1.6% of Western Union shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Usio and Western Union”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Usio	$82.93 million	0.46	$3.31 million	($0.02)	-70.00
Western Union	$4.21 billion	0.71	$934.20 million	$2.29	4.10

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

Analyst Ratings

This is a summary of current ratings and price targets for Usio and Western Union, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Usio	2	1	1	0	1.75
Western Union	5	10	0	0	1.67

Usio currently has a consensus target price of $4.00, suggesting a potential upside of 185.71%. Western Union has a consensus target price of $8.82, suggesting a potential downside of 6.04%. Given Usio’s stronger consensus rating and higher possible upside, equities analysts clearly believe Usio is more favorable than Western Union.

Risk & Volatility

Usio has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500. Comparatively, Western Union has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500.

Summary

Western Union beats Usio on 9 of the 14 factors compared between the two stocks.

About Usio

Usio, Inc., together with its subsidiaries, provides integrated electronic payment processing services to merchants and businesses in the United States. The company offers various types of automated clearing house (ACH) processing; and credit, prepaid card, and debit card-based processing services. Its ACH transaction processing services include Represented Check and Check Conversion for electronic payment facilitation. In addition, the company offers merchant account services for the processing of card-based transactions through the VISA, MasterCard, American Express, Discover, and JCB networks, including online terminal services accessed through a website or retail services accessed through a physical terminal. Further, it provides a proprietary web-based customer service application that allows companies to process one-time and recurring payments through e-checks or credit cards; and an interactive voice response telephone system to companies, which accept payments directly from consumers over the telephone using e-checks or credit cards. Additionally, the company offers prepaid and incentive card issuance services; and operates a prepaid core processing platform, as well as provides additional services, such as electronic bill presentment, document composition, document decomposition, and printing and mailing services for various industry verticals, including utilities and financial institutions. It markets and sells ACH products and services primarily through resellers; and prepaid card program directly to government entities, corporations, and to consumers through the internet. The company was formerly known as Payment Data Systems, Inc. and changed its name to Usio, Inc. in June 2019. Usio, Inc. was incorporated in 1998 and is headquartered in San Antonio, Texas.

About Western Union

The Western Union Company provides money movement and payment services worldwide. The company operates through Consumer Money Transfer and Consumer Services segments. The Consumer Money Transfer segment facilitates money transfers for international cross-border and intra-country transfers, primarily through a network of retail agent locations, as well as through websites and mobile devices. The Consumer Services segments offers bill payment services, which facilitate payments for consumers, businesses, and other organizations, as well as money order services, retail foreign exchange services, prepaid cards, lending partnerships, and digital wallets. The company was founded in 1851 and is headquartered in Denver, Colorado.