Critical Review: Alliance Data Systems Corporation (ADS) versus Ituran Location and Control (ITRN)
Alliance Data Systems Corporation (NYSE: ADS) and Ituran Location and Control (NASDAQ:ITRN) are both business services companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, profitability, institutional ownership, risk and valuation.
Insider and Institutional Ownership
96.0% of Alliance Data Systems Corporation shares are owned by institutional investors. Comparatively, 51.8% of Ituran Location and Control shares are owned by institutional investors. 2.6% of Alliance Data Systems Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Risk & Volatility
Alliance Data Systems Corporation has a beta of 1.76, suggesting that its share price is 76% more volatile than the S&P 500. Comparatively, Ituran Location and Control has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500.
This table compares Alliance Data Systems Corporation and Ituran Location and Control’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Alliance Data Systems Corporation||6.77%||59.67%||3.74%|
|Ituran Location and Control||18.67%||36.12%||22.00%|
Alliance Data Systems Corporation pays an annual dividend of $2.08 per share and has a dividend yield of 1.0%. Ituran Location and Control pays an annual dividend of $0.96 per share and has a dividend yield of 2.7%. Alliance Data Systems Corporation pays out 23.7% of its earnings in the form of a dividend. Ituran Location and Control pays out 49.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Valuation & Earnings
This table compares Alliance Data Systems Corporation and Ituran Location and Control’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Alliance Data Systems Corporation||$7.41 billion||1.58||$1.47 billion||$8.78||23.97|
|Ituran Location and Control||$218.77 million||3.46||$65.10 million||$1.95||18.49|
Alliance Data Systems Corporation has higher revenue and earnings than Ituran Location and Control. Ituran Location and Control is trading at a lower price-to-earnings ratio than Alliance Data Systems Corporation, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and recommmendations for Alliance Data Systems Corporation and Ituran Location and Control, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Alliance Data Systems Corporation||3||7||10||0||2.35|
|Ituran Location and Control||0||0||1||0||3.00|
Alliance Data Systems Corporation presently has a consensus target price of $253.44, indicating a potential upside of 20.44%. Ituran Location and Control has a consensus target price of $31.00, indicating a potential downside of 14.01%. Given Alliance Data Systems Corporation’s higher possible upside, equities research analysts clearly believe Alliance Data Systems Corporation is more favorable than Ituran Location and Control.
Alliance Data Systems Corporation beats Ituran Location and Control on 10 of the 16 factors compared between the two stocks.
Alliance Data Systems Corporation Company Profile
Alliance Data Systems Corporation is a provider of data-driven marketing and loyalty solutions serving consumer-based businesses in a range of industries. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. The Company operates through three segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company’s Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty); Epsilon, which provides end-to-end, integrated direct marketing solutions, and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company’s private label and co-brand retail credit card programs.
Ituran Location and Control Company Profile
Ituran Location and Control Ltd. is a provider of location-based services, consisting of stolen vehicle recovery (SVR), fleet management services and other tracking services. The Company also provides wireless communication products used in connection with its location-based services and various other applications. Its operations consist of two segments: location-based services and wireless communications products. Its location-based services segment consists of its SVR and tracking services, fleet management and value-added services consisted of personal locater services and concierge services. Its wireless communications products segment consists of short and medium range two-way machine-to-machine wireless communications products that are used for various applications, including automatic vehicle location (AVL) and automatic vehicle identification. It primarily provides its services, as well as sells and leases its products in Israel, Brazil, Argentina and the United States.
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