Analyzing Green Dot Corporation (GDOT) & NetSpend Holdings (NTSP)
Green Dot Corporation (NYSE: GDOT) and NetSpend Holdings (NASDAQ:NTSP) are both consumer credit cards services companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.
Institutional and Insider Ownership
77.0% of Green Dot Corporation shares are owned by institutional investors. 11.0% of Green Dot Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
This table compares Green Dot Corporation and NetSpend Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Green Dot Corporation||8.61%||12.55%||4.88%|
This is a breakdown of current recommendations for Green Dot Corporation and NetSpend Holdings, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Green Dot Corporation||0||4||10||0||2.71|
Green Dot Corporation presently has a consensus price target of $50.18, suggesting a potential downside of 21.35%.
Earnings & Valuation
This table compares Green Dot Corporation and NetSpend Holdings’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Green Dot Corporation||$718.77 million||4.48||$41.60 million||$1.38||46.23|
Green Dot Corporation has higher revenue and earnings than NetSpend Holdings. NetSpend Holdings is trading at a lower price-to-earnings ratio than Green Dot Corporation, indicating that it is currently the more affordable of the two stocks.
Green Dot Corporation beats NetSpend Holdings on 8 of the 8 factors compared between the two stocks.
About Green Dot Corporation
Green Dot Corporation (Green Dot) is a pro-consumer financial technology innovator. The Company is a provider of reloadable prepaid debit cards and cash reload processing services in the United States. The Company operates through two segments: Account Services, and Processing and Settlement Services. The Company’s account services segment includes branded deposit account programs, including Green Dot-branded and affinity-branded general purpose reloadable (GPR) card accounts; checking accounts, open-loop gift cards and secured credit cards. The Company’s processing and settlement services include its money processing services, which consists of reload services and 1099 disbursements, and its tax refund processing services. It also has operations in the mobile technology and mobile banking with GoBank mobile checking account. Through its subsidiary, SBBT Holdings, LLC (TPG), it also operates as a processor of tax refund disbursements in the United States.
About NetSpend Holdings
NetSpend Holdings, Inc. (NetSpend) is a provider of general-purpose reloadable prepaid debit cards (GPR) cards, and related alternative financial services to underbanked consumers in the United States. NetSpend’s GPR cards are tied to the Federal Deposit Insurance Corporation (FDIC)-insured depository accounts and can be used to make purchase transactions at any merchant that participates in the MasterCard, Visa or PULSE networks and to withdraw funds at participating automated teller machines (ATMs). The Company also offers to its cardholders direct deposit, interest-bearing savings accounts, bill pay and card-to-card transfer functionality, personal financial management tools and online and mobile phone card account access. As of December 31, 2010, the Company marketed its GPR cards through approximately 750 retail distributors at approximately 39,000 locations. As of August 21, 2010, the Company ceased marketing gift cards.
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