Critical Comparison: Cardtronics (CATM) versus Resources Connection (RECN)
Cardtronics (NASDAQ:CATM) and Resources Connection (NASDAQ:RECN) are both small-cap business services companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.
This table compares Cardtronics and Resources Connection’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of recent ratings for Cardtronics and Resources Connection, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Cardtronics currently has a consensus target price of $35.25, indicating a potential upside of 5.44%. Resources Connection has a consensus target price of $16.00, indicating a potential upside of 0.50%. Given Cardtronics’ stronger consensus rating and higher probable upside, analysts plainly believe Cardtronics is more favorable than Resources Connection.
Valuation and Earnings
This table compares Cardtronics and Resources Connection’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Cardtronics||$1.35 billion||1.15||$3.68 million||$1.88||17.78|
|Resources Connection||$654.13 million||0.78||$18.82 million||$0.98||16.24|
Resources Connection has lower revenue, but higher earnings than Cardtronics. Resources Connection is trading at a lower price-to-earnings ratio than Cardtronics, indicating that it is currently the more affordable of the two stocks.
Resources Connection pays an annual dividend of $0.52 per share and has a dividend yield of 3.3%. Cardtronics does not pay a dividend. Resources Connection pays out 53.1% of its earnings in the form of a dividend. Resources Connection has increased its dividend for 6 consecutive years.
Volatility and Risk
Cardtronics has a beta of 1.34, suggesting that its stock price is 34% more volatile than the S&P 500. Comparatively, Resources Connection has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500.
Institutional and Insider Ownership
80.3% of Resources Connection shares are owned by institutional investors. 18.3% of Cardtronics shares are owned by company insiders. Comparatively, 9.8% of Resources Connection shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Cardtronics beats Resources Connection on 11 of the 17 factors compared between the two stocks.
Cardtronics Company Profile
Cardtronics plc provides automated consumer financial services through its network of automated teller machines (ATMs) and multi-function financial services kiosks. The company offers cash dispensing and balance inquiries; and financial related services to cardholders, as well as ATM management and ATM equipment-related services to large retail merchants, smaller retailers, financial institutions, and operators of facilities, such as shopping malls, airports, and train stations. It also provides transaction processing, cash and cash delivery management, supply, and telecommunications, as well as routine and technical maintenance services for ATMs; and owns and operates electronic funds transfer transaction processing platforms that offer transaction processing services to its network of ATMS, as well as other ATMs under managed services arrangements. In addition, the company provides processing services for issuers of debit cards; and owns and operates Allpoint network, a surcharge-free ATM network, which offers surcharge-free ATM access to participating banks, credit unions, and stored-value debit card issuers. As of December 31, 2018, it provided services to approximately 227,000 ATMs in North America, Europe, Africa, Australia, and New Zealand. The company was founded in 1989 and is based in Houston, Texas.
Resources Connection Company Profile
Resources Connection, Inc. provides business consulting services under the Resources Global Professionals name in North America, Europe, and the Asia Pacific. The company offers process transformation and optimization, financial reporting and analysis, technical and operational accounting, and merger and acquisition due diligence and integration services; new accounting standards implementation and remediation support services; and audit readiness, and preparation and response services. It also provides information management services comprising program and project management, business and technology integration, data strategy, and business performance management. In addition, the company offers corporate advisory, strategic and crisis communications, and restructuring services; and governance, risk, and compliance (GRC) management services that include governance, assessments, auditing and automation of programs managing regulatory compliance, enterprise risk management, internal audits, operational risk management, and data security and privacy services. Further, it provides strategy development, procurement and supplier management, logistics and materials management, supply chain planning and forecasting, and unique device identification compliance; and change management, organization development and effectiveness, employment engagement, compensation and incentive plan strategies and design, and optimization of human resources technology and operations. Additionally, the company offers legal and regulatory supporting services for commercial transactions, global compliance initiatives, law department operations, and law department business strategy and analytics. It also provides policyIQ, a cloud-based GRC software application. The company was formerly known as RC Transaction Corp. and changed its name to Resources Connection, Inc. in August 2000. Resources Connection, Inc. was founded in 1996 and is headquartered in Irvine, California.
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